Balmer v. Hca, Inc.

• Decision Date: 14 September 2005
• Docket Number: No. 04-6199.,No. 04-5688.,04-5688.,04-6199.
• Citation: 423 F.3d 606
• Parties: Shannon BALMER, Plaintiff-Appellant, v. HCA, INC.; Health Care Indemnity, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

423 F.3d 606

Shannon BALMER, Plaintiff-Appellant, v. HCA, INC.; Health Care Indemnity, Inc., Defendants-Appellees.

No. 04-5688.

No. 04-6199.

United States Court of Appeals, Sixth Circuit.

Argued: June 8, 2005.

Decided and Filed: September 14, 2005.

COPYRIGHT MATERIAL OMITTED

ARGUED: John D. Schwalb, Williams & Schwalb, Franklin, Tennessee, for Appellant. W. Travis Parham, Waller, Lansden, Dortch & Davis, Nashville, Tennessee, for Appellees. ON BRIEF: John D. Schwalb, Williams & Schwalb, Franklin, Tennessee, for Appellant. W. Travis Parham, Robert E. Boston, Waller, Lansden, Dortch & Davis, Nashville, Tennessee, for Appellees.

Before: SILER and GIBBONS, Circuit Judges, LAWSON, District Judge.^*

OPINION

GIBBONS, Circuit Judge.

Shannon Balmer appeals the grant of summary judgment and the award of attorneys' fees to Health Care Indemnity, Inc. in this employment discrimination action under Title VII, the Equal Pay Act, and the Tennessee Human Rights Act. For the following reasons, we affirm the district court's grant of summary judgment and reverse the attorneys' fees award.

I.

Health Care Indemnity, Inc. ("HCI") is an indirect, wholly-owned subsidiary of HCA, Inc. HCI provides insurance coverage and claims handling for hospitals affiliated or previously affiliated with HCA. HCI provides limited general liability and employment practices insurance coverage to beneficiary hospitals, but approximately ninety-five percent of claims handled by HCI relate to allegations of medical malpractice.

Plaintiff-appellant Shannon Balmer was hired by HCI in April 1999 as a claims supervisor earning an annual salary of $39,500.00. Balmer's responsibilities included processing and monitoring claims from HCI-insured hospitals in various states not including Tennessee. At the time Balmer was hired, she had two and one-half years of limited experience in the insurance industry as a Medicare fraud investigator for CIGNA. Her experience did not meet the requirement of three to seven years of claims experience stated in the advertisement for the position. Frank Halliburton, a male, was hired as a claims supervisor on the same day as Balmer with an annual salary of $50,800.00. Balmer was not aware of Halliburton's starting salary but did inquire into whether HCA was willing to pay her more after a human resources representative informed her that $45,000.00 was at the low end of the salary range for claims supervisors. She was told that her starting salary was not open for negotiation. Balmer often complained about her salary.

In February 2000, Chris Gentile, Balmer's supervisor, and Larraine Gerelick, Gentile's supervisor, positively reviewed Balmer's job performance, resulting in her salary being increased by six percent. Balmer's raise, as a percentage of salary, was higher than the raises given to other claims supervisors. In July or August 2000, at Gerelick's suggestion, Balmer received a "Star Award," which was accompanied by gift certificates valued at $2,331.00. Despite the raise and Star Award, Balmer continued to complain about her pay.

Soon after the February 2000 review, Balmer learned the amount of Halliburton's salary. When Balmer raised the difference between her salary and Halliburton's, she was told that Halliburton was allowed to negotiate his salary because he had more insurance industry experience. Halliburton had worked as a Claims Specialist for the Tennessee School Board Association for eight months immediately preceding his employment with HCI, and, prior to that, he worked for AllState for eleven years. According to Gerelick, Halliburton had substantial experience relevant to his duties as a claims supervisor at HCI warranting his higher starting salary. Halliburton's responsibilities at AllState included reengineering investigation procedures, working with legal counsel, acting as company spokesperson at trials, depositions, and settlement conferences, and responsibility for managing and administering budgets. Halliburton's starting salary at HCI, $50,800.00, was a decrease from his salary at his previous job. Balmer's starting salary of $39,500.00 was an increase from her salary at CIGNA.

In July 2002, HCI announced that six claims supervisors, four females and two males, were being promoted to the position of senior claims supervisor. Balmer pursued one of the positions and alleges that but for her sex she would have gotten the promotion. Later that month, Balmer met with Gerelick to discuss the pay disparity between Balmer and Halliburton. Gerelick acknowledged the disparity but told Balmer that Halliburton had more years of experience in the insurance industry. Gerelick also told Balmer that, though Balmer was doing a much better job than Halliburton, budgetary constraints meant that the disparity could not be rectified until 2001.

Balmer told Gentile that she planned to file a gender discrimination suit against HCI in September 2000. Balmer claims, but the appellees deny, that Gentile told Balmer that he was aware that she had health problems and wondered if she could handle a battle at that time. He also allegedly told her that HCI would come down hard on her or something similar and that it would be difficult for her to find another job in the same field because Gerelick knew so many people in the industry. Balmer claims that, following the encounter, Gentile did not return her phone calls, failed to give her authority needed to settle cases, did not respond to her emails, and began keeping track of her time away from the office.

In October 2000, while Balmer was out of town and away from the office for three days, Gentile viewed the contents of Balmer's work-related mail "in-box." One of the items in the in-box was an invoice from Thompson & Miller, a Louisville law firm that HCI often hires to represent its insureds in medical malpractice actions in Kentucky. The invoice reflected legal work about employment issues. Gentile suspected that the legal work was related to Balmer's personal dispute with HCI rather than to HCI hospital claims she was supervising.¹ Consequently, Gentile contacted Thompson & Miller to request information about Balmer's research request. In response to his request, Gentile received legal memoranda addressing the precise issues presented by Balmer in her lawsuit.

Gentile also found an earlier Thompson & Miller invoice dated September 15, 2000, related to employment law issues. Balmer had approved the invoice and submitted it to HCI to be paid as company business. Gentile inquired into the Thompson & Miller invoices upon Balmer's return to work. Balmer claims that she had potential claims with Equal Pay Act exposure and had been advised that an unasserted claim for Equal Pay Act exposure existed in a pending case and that Gentile had authorized the Thompson & Miller research.² Gentile discussed the situation with Gerelick, who concluded that Balmer had misused company funds. Gerelick decided that Balmer's employment should be terminated but stated that she would not have terminated Balmer if the legal research had been authorized by Gentile. Gerelick met with Balmer on November 21, 2000, and offered her the choice between being terminated or resigning. Balmer chose to resign. After resigning, Balmer filed a charge with the Equal Employment Opportunity Commission.

Balmer originally filed suit in the Circuit Court for Davidson County, Tennessee, alleging violations of the Tennessee Human Rights Act ("THRA"), Tenn.Code Ann. § 4-21-101 et seq. The case was removed to the United States District Court for the Middle District of Tennessee based on allegations in the complaint relating to appellees' claimed violations of federal law. An Agreed Protective Order was entered on July 30, 2003, designating various documents as confidential and requiring that they be filed under seal. On November 13, 2003, Balmer filed her First Amended Complaint, alleging violations of the Equal Pay Act, 29 U.S.C. § 206(d)(1), Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the THRA. The First Amended Complaint sought certification of a plaintiff class, as did the original complaint. Balmer failed to file a motion for class certification by the court-imposed deadline and did not request an extension of that deadline. Balmer's counsel filed a motion to withdraw on November 25, 2003, which the district court granted on December 5, 2003. The appellees filed a motion for summary judgment on December 9, 2003. The district court issued its Memorandum Opinion and Order granting summary judgment to the appellees on April 30, 2004. Balmer filed a timely notice of appeal.

Balmer also appeals the award of attorneys' fees to appellees. Appellees filed a motion for attorneys' fees as "prevailing parties" under Title VII. HCI moved initially for fees in excess of $91,000.00 The trial court held that the claims of retaliation and gender-based wage discrimination were not frivolous, but that the class action allegations, the sexual harassment allegations and the failure to promote claims were frivolous, entitling the appellees to an award of fees. HCI resubmitted its claim in accordance with the district court's July 8, 2004, order. In the amended claim, HCI asserted that it was entitled to $8,270.20 in fees where the invoices referenced one or more of the fee-recoverable allegations. All of these fees were incurred prior to the filing of Balmer's amended complaint. The appellees also sought $4,166.89, or five percent of the remaining fees, as attributable to the defense of frivolous claims, but which could not be specifically identified as related to such claims. Balmer opposed the amount requested by the appellees. The district court awarded the full amount requested in the amended claim.

The district court issued its Memorandum Opinion and Order granting the appellees more than $12,000.00 in attorneys fees on August 24, 2004. The Clerk entered the final taxation of costs on ...