Opinion
Civil Action No. 3:04-CV-975-B.
June 16, 2005
MEMORANDUM ORDER
Before the Court is the Motion of Defendants Aegon Direct Marketing Services, Inc. (ADMS) and Stonebridge Life Insurance Company ("Stonebridge") (collectively, "the Defendants") for Summary Judgment on the entirety of the claims brought against them by the Plaintiff, Stephanie Mahon ("Mahon"), filed February 4, 2005. Also before the Court is Defendants' Objections to Plaintiff's Summary Judgment Evidence and Motion for Rule 11 Sanctions, Filed March 11, 2005 and Plaintiff's Motion to Strike Summary Judgment Evidence, filed February 24, 2005. For the reasons discussed, the Defendants' motion for summary judgment is GRANTED, the Motion of the Plaintiff to Strike is DENIED as moot, and the Motion of the Defendants for Sanctions is DENIED.
Both parties have objected to evidence that the other has submitted with its respective briefing in support of the motions for summary judgment or responses thereto. Because the Court has found it unnecessary to rely upon the majority of the challenged testimony, it declines at this time to consider each of the objections and instead addresses specific objections to those portions of the disputed evidence the Court regards as relevant to the resolution of particular summary judgment issues. The remainder of the parties' objections are DENIED as moot.
I. Background
The facts are derived from the parties' pleadings and the evidence contained in the summary judgment record. Unless characterized as a contention by one of the parties, these facts are undisputed. The Court notes that Defendants have included a footnote in their MSJ brief with the following language: "The Statement of Undisputed Facts is based largely on Mahon's deposition testimony. For purposes of Defendants' Motion for Summary Judgment only, Defendants accept the factual assertions in Mahon's cited testimony as true." (D MSJ at 2, n. 1).
This is an employment case in which Plaintiff Stephanie Mahon ("Mahon") contends that Defendants ADMS, Stonebridge, and Smith discriminated against her based on her age and sex, wrongfully discharged her, sexually harassed her and intentionally inflicted emotional distress upon her in the scope of her employment with Stonebridge. (Pl. Fourth Am. Pet. ¶ 1). Defendant Smith was Mahon's supervisor during her employment with Stonebridge. ( Id. ¶ 8).
Mahon filed the instant lawsuit against defendants ADMS and Smith in the County Court of Law No. 5, Dallas, Texas on September 30, 2003. Specifically, Mahon alleges that Smith "asked her to perform legal work on his behalf during company hours for his private business," (Pl. Sec. Am. Orig. Pet. ¶ 9), and, after she refused, "began an intentional and determined campaign to smear, disparage, harass, cajole, trap, lie and insult [her]." ( Id. ¶ 12). Mahon contends that these acts were done "with the approval and/or ratification of Defendants and were designed to force [Mahon] to quit or lay a false pretext for her termination." ( Id.). Mahon seeks equitable relief and compensatory and punitive damages. (Pl. Fourth Am. Orig. Pet. ¶ 1).
On May 7, 2004, the Defendants filed a notice of removal, based on diversity jurisdiction. (Notice 2). Mahon filed a motion to remand the case to Texas state court on June 7, 2004, and on October 28, 2004, this Court denied Mahon's motion for remand, finding that non-diverse Texas citizen Smith had been fraudulently joined. (October 28, 2004 Order) (doc. 24). Smith later moved for summary judgment on Mahon's claims against him on February 2, 2005, and the Court granted Smith's motion in its entirety on May 25, 2005. Currently before the Court is the Defendants' motion for summary judgment on Mahon's claims against them, objections filed by both parties as to the other's summary judgment evidence, and a motion for sanctions against Mahon filed by the Defendants. The Court will address each of these below.
B. Factual Background. 1. Mahon Accepts an Offer of Employment.
In 1977, Mahon was admitted to practice in New York, and has been a licensed attorney since that time. (Mahon Dep., D App. at 6). In 1990, Mahon moved to Texas and worked for various employers in legal positions from that time until the beginning of her employment with the Defendants. ( Id. at 13, 14-15, 16-17, 20-21). Mahon has never been licensed to practice law in the state of Texas. ( Id. at 21-22).
The Defendants question Mahon's assertion that she has never been licensed to practice in the state of Texas, citing to PACER printouts attached to their motion which list her as "lead counsel" while working for the FDIC. (D MSJ at 3). These printouts, however, lack foundation and authentication and cannot be used to generate a genuine issue of material fact as to Mahon's licensure by the Texas bar without further proof.
Mahon was hired by J.C. Penney Life Insurance/J.C. Penny Direct Marketing Services ("J.C. Penney") for the position of Contract Manager some time in December 2000. (D MSJ at 2, Mahon Dep., D App. at 8-10, 23). Smith both interviewed Mahon for the position and offered her the job. (D MSJ at 2; Mahon Dep., D App. at 23; Smith Dep., D App. at 179). At the time Mahon was hired, she was 49 years old. (Mahon Dep., D App. at 4). The Defendants claim that Mahon "admits that her employment was at will," and cite to her deposition testimony. (D MSJ at 2; Mahon Depo., D App. at 84-85). The Court sustains Mahon's objection the Defendants' assertion. (P Obj. at 2).
During her deposition, Mahon testified as follows:
Q. Okay. Did you understand your employment with the company to be at will?
A. Well, it wasn't mentioned in the letter, but I know what at will means.
Q. Okay. Did you understand your employment with the company to be at will? Do you understand what at will employment is?
A. I know what at will means.
Q. Okay. Did you understand your employment with the company to be at will?
A. Well, it wasn't mentioned to me in the letter that I got, the one that you showed me earlier, but I know what at will means.
Q. Okay. Do you recall it being mentioned in the online authorization handbook?
A. I don't recall, but it could be in there.
Q. Okay. Did you understand, though, that your employment relationship was, with the company was at will. Was that your understanding?
A. Well, that's what my attorney says.
Q. Okay. What was your understanding?
Mr. Kalis. If your answer is based in whole or in part on something I've told you, then I'm going to instruct you not to answer the question. If you can answer it separate and apart from what I've told you, then you can go ahead and answer it.
. . .
Q. Throughout your employment with the company, you understood that you could quit at any time, correct?
A. Yes.
Q. Okay. And the company could terminate you at any time as long as the underlying reason for the termination wasn't prohibited by law.
A. Yes.
Mahon Dep., D App. at 84-85.
In the Appendix in support of Mahon's response, she includes an affidavit in which she clarifies that "When I signed certain documents, such as Exhibit 9 to my deposition — the confirmation of the verbal offer from [J.C. Penney], I was not told nor did I agree that my employment with them would be "at will." (Mahon Affidavit, P App. at 2). Some time during June of 2001, J.C. Penney was sold to ADMS and changed its name to Stonebridge Life Insurance Company. (D MSJ at 2; Mahon Dep., D App. at 8).
While Mahon may not use her affidavit to counter her previous sworn testimony (Defendants' Objections at 1), she may, however, use it to supplement the deposition testimony. See S.W.S. Erectors, Inc. V. Infax, Inc., 72 F.3d 489, 495 (5th Cir. 1996); Van T. Junkins and Ass., Inc. v. U.S., 736 F.2d 656 (C.A. Ala. 1984). The Court finds that the statement offered in Mahon's affidavit merely clarifies her previous sworn testimony, that, at the time she signed the documents in question she was not informed that her employment was at will. This does not contradict the deposition testimony cited by the Defendants.
2. Mahon's Employment History With the Defendants.
The Defendants' business is to market insurance products directly to the consumer, without using insurance agents, and in doing so, they enter into contracts with various banks who then market the products to their customers. (D App. at 12).
Although the contract manager position was not a legal position a law degree was "preferred but not required," for the contract manager position for which she was hired. (Mahon Dep., D App. at 23, 25; D MSJ at 3). The company maintained a separate legal department. (Mahon Dep., D App. at 23-24). Mahon's responsibility as the company's contract manager was to manage the process and manage the various steps along the way of the development of the Defendants' contracts with the banks who marketed the insurance products to their customers. ( Id. at 25).
While the Defendants disagree and characterize Mahon's assertion a bit differently in their motion, they have chosen to accept this factual assertion, as well as others they cite from Mahon's testimony, as true for purposes of their pending motion for summary judgment. (D MSJ at 2, n. 1).
3. Allegations of Poor Performance.
The Defendants claim that Smith frequently counseled Mahon about mistakes in her work performance. (D MSJ at 5; Aug. 28, 2001 Smith Memo, D App. at 111; Jan. 12, 2003 Smith Memo, D App. at 121-22). While the Defendants claim that Mahon admitted in her deposition that Smith frequently "counseled her about mistakes in her work or other performance issues," the Court agrees with Mahon that this assertion mischaracterizes Mahon's deposition testimony. Compare (D MSJ at 5; Mahon's Objections; Mahon Dep., D App. at 36, 43-44, 46-48, 49-51, 56-57). The parties have submitted conflicting evidence regarding alleged typographical errors and mistakes in the contracts Mahon and Smith worked on. ( Id.; see also Mahon Dep., D App. at 36, 50, 64; 38-39; Nov. 18, 2002 email, D App. at 106). Likewise, the parties disagree over who was responsible for communicating issues to the legal department and on whether all contracts had to get approval from the legal department before being sent out. (Smith Dep., D. App. at 176-77; Mahon Dep., D App. at 97). Additionally, there is conflicting evidence over the timeliness of Mahon's work (Smith Dep., D App. at 169; 172; Mahon Dep., D App. at 46), her ability to properly maintain her files, (Smith Dep., D App. at 97; April 2003 Review, D App. at 125; Mahon Dep. at 110-11, 132), and Mahon's maintenance of the computer system. (Smith Dep., D App. at 174, Jan. 10, 2003 email from Smith, D. App. at 110; Mahon Dep., D. App. at 35, 76-78). 4. Smith's Treatment of Mahon.
While the Defendants argue that Smith repeatedly counseled Mahon on the various alleged performance issues (D MSJ at 8, citing Mahon Dep., D. App. at 63-64), Mahon argues that Smith behaved inappropriately, including harassing her, refusing to provide her sufficient office and file space, and refusing to give her necessary information to do her job. (Mahon Dep., D. App. at 63-64; 57; 58, 72). In support of her age discrimination claim, Mahon claims that on April 17, 2001, Smith chastised her for not taking care of personal things for him as her predecessor had, and said that he should have hired a "baby attorney." (Mahon Dep., D. App. at 43-46, 81). Mahon also claims that once, when Mahon asked a group of employees, including Smith, what music group they were discussing, that Smith responded, "Oh, you wouldn't know that — you are too old." (Mahon Dep., D App. at 70).
In support of her sex discrimination claim, Mahon testified that, some time in the summer of 2001, Smith referred to another female employee, D.J. Compton, as a "fat bitch" (Mahon Dep., D. App. at 67), instructing Mahon not to share any information regarding her contract work with that employee. Mahon also alleges that Smith called employee Terri Slaughter both a "snake" and a "bitch," instructing Mahon not to trust her. (Mahon Dep., D. App. 67-69). Mahon asserts that Smith "rub[bed] up against her chair and scare[d] her." ( Id. at 87). Mahon also claims that she faced unfair allegations of mistakes and unfair treatment from a company client, Angelo Poccia, which she was forced to accept because Poccia and the company he worked for "got special treatment from the business partner group," including spending company money to entertain Poccia at topless bars and purchase "lap dances" for him. (Mahon Dep., D App. at 53-54).
Mahon maintains that Smith "systematically excluded [her] from meetings . . .", "controlled information," "didn't allow [her] to have necessary information and material [she] needed to do a good job as contract manager," and told her to "type faster." (Mahon Dep., D App. at 82). Mahon also alleges that Smith lied about her and her work. ( Id.). Four months before she was terminated, Mahon filed a complaint with Angie Bowers in Human Resources. (Mahon Dep., D App. at 57-58; 72).
5. Mahon's Evidence Supporting Her Sabine Pilot Claim.
Mahon testified at her deposition that the reason for her ultimate termination was her refusal, on two separate occasions early in her career with the company, to perform personal legal work for Smith's side real estate business, knowing that she was not licensed to practice law in the State of Texas. (Mahon Dep., D. App. at 59, 61, 83-84, 128-131). However, while Mahon answered "yes" during her deposition when questioned whether she believed her refusal of Smith's request was the sole reason for her termination (Mahon Dep., D App. at 83), the testimony is unclear, because just previously in her testimony she affirmed that she believed she was terminated because of her gender and her age. ( Id. at 83-84).
6. Mahon's Termination.
Ultimately, on May 8, 2003, the company terminated Mahon for her alleged poor performance. (Mahon Dep., D App. at 5, 80, 186). The Defendants mischaracterize Mahon's testimony in her deposition, claiming that Mahon admitted that a client's complaint about a mistake in a contract was a reason for her termination. (D MSJ at 9; Mahon Dep., D App. at 54). In fact, Mahon's testimony reflects that she believed that her knowledge of alleged illicit activities engaged in by the client was "one of things" that lead to her termination. ( Id.).
Mahon has alleged a wrongful termination claim under the Sabine Pilot doctrine, age and sex discrimination claims, a sexual harassment claim, and a claim for intentional infliction of emotional distress. The Defendants have moved for summary judgment on the entirety of Mahon's claims against them. Each claim will be addressed separately below.
II. Analysis
A. Legal Standard.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when the pleadings and record evidence show that no genuine issue of material fact exists and that, as a matter of law, the movant is entitled to judgment. Hart v. Hairston, 343 F.3d 762, 764 (5th Cir. 2003). In a motion for summary judgment, the burden is on the movant to prove that no genuine issue of material fact exists. Provident Life Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). To determine whether a genuine issue exists for trial, the court must view all of the evidence in the light most favorable to the non-movant, and the evidence must be sufficient such that a reasonable jury could return a verdict for the non-movant. See Chaplin v. NationsCredit Corp., 307 F.3d 368, 371-72 (5th Cir. 2002).
B. Mahon's Wrongful Termination Claim.
Mahon claims that she was terminated because she refused to illegally practice law without a license and perform the legal work Smith requested for his side real estate business. (Mahon Dep., D App. at 59, 61, 83-84). Under the Texas Supreme Court case Sabine Pilot Servs. v. Hauck, 687 S.W.2d 733 (Tex. 1985), employers are prohibited from discharging employees if the "sole reason" for their discharge is the employee's refusal to perform an illegal act. Id. at 735. Mahon must demonstrate that she was required to choose between engaging in a criminal act or keeping her job, and that the sole reason she was discharged was her refusal to perform the act. Id., White v. FCI USA, Inc., 319 F.3d 672, 676 (5th Cir. 2003).
The Defendants first argue that Mahon's claim must fail as a matter of law because she cannot prove that the request to perform the illegal act was a condition of employment. (D MSJ at 14), (citing Winters v. Houston Chron. Publ'g Co., 795 S.W.2d 723, 724 (Tex. 1990)). The Court agrees. Mahon has not submitted competent summary judgment evidence that she was faced with choosing to perform the illegal act or losing her job. Both alleged requests took place two years before Mahon's termination, and Mahon has not alleged that Smith threatened her with termination for noncompliance (Mahon Dep., D App. at 58, 62, 151). Mahon's summary judgment evidence fails to raise a genuine issue of material fact regarding her wrongful termination claim, and the Defendants' motion for summary judgment on that claim is therefore GRANTED.
C. Discriminatory Termination.
The Defendants next move for summary judgment on Mahon's claim that she was discriminatorily terminated on the basis of her age and sex. Mahon has brought claims under the TCHRA, alleging that Smith engaged in a pattern of harassment and falsely disparaged her work performance because of her age and gender, resulting in her ultimate termination. The law governing discrimination claims under Title VII and the TCHRA is the same, and claims brought under either statute are subject to the same analysis. Wallace v. Methodist Hosp. Sys., 271 F.3d 212, 219 n. 10 (5th Cir. 2001).
Under the three-step McDonnell Douglas test that governs discrimination claims, Mahon must first put on evidence of a prima facie case of age and sex discrimination. Manning v. Chevron Chem. Co., 332 F.3d 874, 881 (5th Cir. 2003). Then the burden of production then shifts to the Defendants to articulate a legitimate, non-discriminatory reason for its actions. Id. The third step of the McDonnell Douglas test has arguably been altered by the Supreme Court's decision in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003) (holding that the mixed-motive theory of discrimination is available in cases with circumstantial evidence of discrimination). Addressing the Desert Palace decision, the Fifth Circuit has modified the third step of the McDonnell Douglas test. Rachid v. Jack in the Box, Inc., 376 F.3d 305, 312 (5th Cir. 2004). Under the modified test, assuming Mahon can meet the first prong regarding her prima facie case and the Defendants provide a legitimate reason for her termination, Mahon must then produce evidence raising a fact question that (1) the Defendants' reason is not true, but is instead a pretext for discrimination or (2) that the Defendants' reason, while true, is only one of the reasons for its conduct and that race discrimination was a motivating factor. Id.
As for her age discrimination claim, Mahon has offered evidence of Smith referring to her as a "baby attorney," (Mahon Dep., D App. at 43-46, 81) as well as another single comment that she was "too old" to be familiar with a music group. ( Id. at 70). To support her sex discrimination claim, Mahon has offered testimony that Smith referred to other female employees as "bitches" and told Mahon not to trust them. (Mahon Dep., D. App. at 67-69). Mahon has also alleged that Smith "rub[bed] up against her chair and scare[d] her." ( Id. at 87). Mahon claims that she was treated unfairly because she allegedly had information that an important client frequented topless bars with the Defendants' employees. (Mahon Dep., D App. at 53-54). Finally, Mahon alleges that she was wrongly excluded from meetings and was not given the necessary information to do her job well. (Mahon Dep., D App. at 82).
The Court assumes, arguendo, that Mahon has presented sufficient evidence of a prima facie case of age and sex discrimination. The Defendants now must articulate a legitimate, nondiscriminatory motive for Mahon's termination. They have cited Mahon's poor performance. (D MSJ at 18). As discussed in the factual background, there is evidence that Mahon received negative evaluations and that Smith frequently had to counsel her for her alleged poor performance. The Defendants claim that Smith frequently counseled Mahon about mistakes in her work performance. (D MSJ at 5; Aug. 28, 2001 Smith Memo, D App. at 111; Jan. 12, 2003 Smith Memo, D App. at 121-22; Mahon Dep., D App. at 36, 50, 64; 38-39; Nov. 18, 2002 email, D App. at 106; Smith Dep., D App. at 174, Jan. 10, 2003 email from Smith, D. App. at 110; Mahon Dep., D. App. at 35, 76-78). Although, as pointed out above, there is conflicting evidence from the parties on the issue of Mahon's job performance, "courts are not to assess the employer's credibility or the truthfulness of its reason at this stage of the inquiry." St. Mary's Honor Ctr. V. Hicks, 509 U.S. 502, 509 (1993). The Court finds that the Defendants have sufficiently articulated a legitimate reason for Mahon's termination — poor performance. Termination for performance issues is a legitimate reason. See, e.g., Sandstad v. CB Richard Ellis, Inc., 309 F.3d 893, 899 (5th Cir. 2002) (finding legitimate, non-discriminatory reason based on performance issues).
While courts are not to assess the truthfulness of the employers reason at this stage of the analysis, the employer cannot meet it burden of articulating a legitimate reason for its decision if the evidence offered "unmistakably demonstrates that it could not have motivated the employer [to make the challenged decision]. See Patrick v. Ridge, 394 F. 3d 311, 318 (5th Cir. 2004) (citing St. Mary's Honor Ctr. V. Hicks, 509 U.S. 502, 509 (1993)).
Mahon must now raise evidence sufficient to form a genuine issue of fact that (1) the Defendants' reason is not true, but is instead a pretext for discrimination or (2) that the Defendants' reason, while true, is only one of the reasons for its conduct and that race or sex discrimination was a motivating factor. It is not sufficient for Mahon to introduce evidence that the company wrongly believed her to be a poor performer — Mahon must provide evidence raising a fact question on whether the company terminated Mahon based on her age or sex or that age or sex was a motivating factor in the decision. Mahon has failed in her burden. To raise a fact question on the Defendants' reason, she refers the Court to deposition testimony that, at best, challenges the accuracy of the Defendants' assessment of her performance. (P MSJ at 14). Her reliance upon "Smith's [alleged] remarks about her age and the constant stream of vulgarities and sexual innuendo" to raise a fact question likewise falls short because the few remarks she has identified are insufficient to raise a fact question of pretext or mixed motive. Other than generally maintaining that "Smith's stray comments show his true ambition" Mahon fails to identify any remarks other than those specified above which include Smith's references to a "baby attorney", Mahon being "too old" to know about a contemporary music group and using the terms "bitches" and "snake." (P MSJ at 13-17). These few specific remarks coupled with Mahon's generalized accusations do not raise a fact question on the Defendants' reason for her termination, hence the Defendants' motion on Mahon's termination claim is GRANTED.
D. Sexual Harassment.
Next, the Defendants move for summary judgment on Mahon's sexual harassment claim. Mahon must, in order to prevail, demonstrate that she is (1) a member of a protected group, (2) was subject to harassment, (3) that the harassment was based on her sex, and (4) that the harassment complained of affected a term, condition or privilege of employment. See Shepherd v. Comptroller of Public Accounts of the State of Tex., 168 F.3d 871, 873 (5th Cir.). The Defendants argue that Mahon's sexual harassment claim must fail as a matter of law because she cannot prove the fourth element, that the harassment was "`sufficiently severe or pervasive so as to alter the conditions of employment and create an abusive working environment.'" (D MSJ at 27-28) (citing Watts v. Kroger Co., 170 F.3d 505, 509 (5th Cir. 1999)). The Court agrees. Even assuming that all of the evidence Mahon produces as evidence for harassment is admissible, it is insufficient to establish that the alleged harassment was severe or pervasive enough to rise to the level of a valid claim of sexual harassment. See, e.g. Celestine v. Petroleos de Venezuella, S.A., 266 F.3d 343, 354 (5th Cir. 2001) (finding eight individual incidences of harassment over a two year period insufficient). The Court thus GRANTS the Defendants' motion for summary judgment on Mahon's sexual harassment claim.
Mahon does not address the Defendants' motion for summary judgment on her harassment claim in her response.
E. Intentional Infliction of Emotional Distress.
Finally, the Defendants move for summary judgment on Mahon's claim for intentional infliction of emotional distress. As discussed in the Court's Order denying Mahon's motion for remand (Oct. 28, 2004 Order (doc. 24) at 5), Mahon's allegations do not rise to the level of extreme and outrageous in character. Moreover, such claims rarely exist in the employment context, and Mahon's evidence fails to demonstrate that Smith's conduct was "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in civilized community." Twyman v. Twyman, 855 S.W.2d 619, 621-22 (Tex. 1993); GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 611-12 (Tex. 1999) (holding that IIED claims rarely exist in the employment context.
As the Court noted in its October 28, 2004 Order,
Mahon's allegations contained in her petition, even if true, do not allow this Court to conclude that Smith could be liable for IIED under Texas law, where even conduct rising to the level of illegality, "except in the most unusual cases, is not the sort of conduct, as deplorable as it may sometimes be, that constitutes `extreme and outrageous' conduct." Wilson v. Monarch Paper Co., 939 F.2d 1138, 1143 (5th Cir. 1991); Wilson v. Sysco Food Serv. of Dallas, Inc., 940 F. Supp. 1003, 1007, 1013 (N.D. Tex. 1996) (Buchmeyer, J.) (holding that defendant's conduct, including reprimanding plaintiff for refusing to sleep with customers and ultimately terminating her was insufficient to rise to the level of IIED in the employment context).Id. at 5.
Therefore, the Court GRANTS the Defendants' motion for summary judgment on Mahon's IIED claims against them as a matter of law.
F. Motion for Sanctions.
On March 11, 2005, the Defendants filed objections to Mahon's summary judgment evidence, and also requested Rule 11 sanctions against Mahon for filing allegedly "frivolous" objections to the Defendants' summary judgment evidence. (doc. 58). Because the Defendants failed to comply with Rule 11 procedures in filing their objections, and because the Court finds the Defendants' motion unfounded, their motion is DENIED.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS the Defendants' Motion for Summary Judgment on all of Mahon's claims against them. The Court DENIES Mahon's motion to strike as moot. The Defendants' Motion for Sanctions is likewise DENIED.
SO ORDERED.