O'Donnell v. Ne. Ohio Neighborhood Health Servs., 108541

• Decision Date: 23 April 2020
• Docket Number: No. 108541,108541
• Citation: 2020 Ohio 1609
• Parties: JAMES F. O'DONNELL, Plaintiff-Appellee, v. NORTHEAST OHIO NEIGHBORHOOD HEALTH SERVICES, INC., Defendant-Appellant.
• Court: Ohio Court of Appeals

2020 Ohio 1609

JAMES F. O'DONNELL, Plaintiff-Appellee, v. NORTHEAST OHIO NEIGHBORHOOD HEALTH SERVICES, INC., Defendant-Appellant.

No. 108541

COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

April 23, 2020

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas

Case No. CV-17-881337

Appearances:

Brennan, Manna & Diamond, L.L.C., and Christopher B. Congeni and Daniel J. Rudary, for appellee.

The Law Offices of Vincent T. Norwillo, L.L.C., and Vincent T. Norwillo, for appellant.

EILEEN A. GALLAGHER, J.:

{¶ 1} Defendant-appellant Northeast Ohio Neighborhood Health Services, Inc. ("NEON") appeals the trial court's judgment after a jury returned a verdict in favor of plaintiff-appellee James O'Donnell and against NEON on O'Donnell's age discrimination claims under R.C. 4112.02(A) and the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. 621 et seq. For the reasons that follow, we affirm.

Procedural and Factual Background

{¶ 2} NEON is a not-for-profit, federally qualified health center ("FQHC") network of community health centers that provides outpatient primary care services in the Greater Cleveland area. O'Donnell is NEON's former chief financial officer ("CFO"). O'Donnell was hired by NEON in June 1996 as its director of fiscal services. In December 1999, O'Donnell was promoted and for the next 18 years, worked as NEON's CFO. Since approximately 2003, O'Donnell reported to Willie Austin, the organization's president and chief executive officer ("CEO").

{¶ 3} On January 9, 2017, Austin informed O'Donnell that he was terminated. At the time of his termination, O'Donnell was 60 years old. O'Donnell had not received any formal written disciplinary or corrective action prior to his termination, and no explanation was provided to O'Donnell for his termination at the time of his termination. A few days later, O'Donnell was replaced by 35-year-old George Voss, who had previously served as NEON's director of fiscal services.

{¶ 4} On June 6, 2017, O'Donnell filed a complaint against NEON, Austin and Perry Murdock, NEON's director of human relations, (collectively "defendants") in the Cuyahoga County Court of Common Pleas, alleging that he had been terminated because of age in violation of R.C. 4112.02(A).¹ He also filed a complaint with the United States Equal Employment Opportunity Commission ("EEOC"). On his EEOC intake questionnaire, executed on June 7, 2017, O'Donnell checked boxes for discrimination based on "age" and "retaliation." In response to the question, "[w]hat happened to you that you believe was discriminatory," O'Donnell stated:

A) Date: 01/09/2017 Action: Called into a meeting at 4:00 p.m. was told that today was my last day at organization. No reason given. Escorted from premises by armed Cleveland Police Officer!

Name and Title of Person(s) Responsible: Willie F. Austin, Pres & CEO

B) Date: 01/09/2017 Action: Willie F. Austin, Pres & CEO was the person who called me into the meeting, and told me it was my last day. Also present was HR Director, Mr. Perry Murdoch [sic].

{¶ 5} In response to the question, "[w]hy do you believe these actions were discriminatory," O'Donnell stated:

First, I believe the Discharge was in retaliation to my offering to report to the Board of Directors directly, instead of the Pres & CEO, during the November 2016 Board Finance Committee meeting. [The second reason was redacted.] Third, I believe the CEO wanted to replace me with a younger CFO, that he could intimidate.

{¶ 6} After he received a right-to-sue letter from the EEOC, O'Donnell amended his complaint to assert an additional claim of age discrimination against NEON under the ADEA. O'Donnell sought to recover compensatory damages, including lost wages and benefits (both past and future), noneconomic damagesincluding emotional distress and loss of enjoyment of life, consequential damages, punitive damages and attorney fees and costs.

Evidence Presented at Trial

{¶ 7} On February 4, 2019, the case proceeded to a jury trial. At trial, O'Donnell claimed that he had been terminated due to his age because he had the experience to ask "tough questions" regarding the finances of several projects NEON was funding through a subsidiary and would be more difficult to manipulate than someone younger. NEON claimed that O'Donnell was terminated due to a series of incidents of insubordination and disrespect that culminated with O'Donnell's conduct at a November 2016 board meeting. A summary of the evidence presented at trial follows.

NEON's 2015 Audit

{¶ 8} As CFO, one of O'Donnell's job duties was to assist in the external auditing of NEON's financial statements. In the spring and summer of 2016, O'Donnell was working with Plante and Moran, the accounting firm NEON had retained to perform an audit of its 2015 financial statements. During the audit process, an issue arose regarding the lack of sufficient detail in invoices for certain expenditures by Community Integrated Services, Inc. ("CIS"), a for-profit subsidiary of NEON, to determine whether the expenditures should be capitalized or expensed (the "invoice detail issue"). NEON had been loaning money to CIS to get several projects, including a veteran's housing project and an eastside market project, up and running.

{¶ 9} O'Donnell had previously expressed concerns regarding NEON's involvement in these projects because they were "outside the line of the FQHC business" for which NEON received federal funding. Austin claimed that O'Donnell lacked sufficient information regarding the projects to be asking questions about them. Austin testified that he wrote a letter to "the law firm that is hired by the federal government to represent FQHCs" and was told it did not matter what projects the company pursued so long as it was "not using federal dollars" for the projects. NEON's involvement in these projects was approved by its board of trustees.

{¶ 10} As it related to the 2015 audit, the invoice detail issue came to a head in or around May 2016. On May 24, 2016, O'Donnell sent an email to Austin regarding the status of the financial audit. O'Donnell advised Austin that the auditors would not be presenting at NEON's June board meeting and wanted to meet with Arthur Fayne to discuss how costs were being assigned to NEON projects. Fayne's company, Business Development Concepts ("BDC"), was the managing agent for CIS and served as the intermediary between NEON and CIS with respect to the projects. The auditors had requested additional documentation regarding funds being paid to BDC to determine whether the expenditures should be properly capitalized or expensed. Austin testified that he and the board chairman had recently met with the auditors and that the senior audit partner had informed them, at that time, that the auditors had all of the information they needed to close the audit. Austin responded: "These continued delays are unacceptable, as the requests seem unending; one leading to another. The auditors have indicated to me and the Board Chair that they had the information needed to close out. That is what they need to do."

{¶ 11} In a May 25, 2016 email to Austin, O'Donnell stated:

I am pretty confident you misinterpreted what would happen subsequent to your meeting with [the auditors]. You may have communicated "what" was transpiring; but they still needed to test the "transactions" of what was transpiring to confirm your explanations. That's what auditing is!

It is notable to see that the same transactions requested from Arthur, yielded no actual proof that the "payments" were being made to his subcontractors, only [i]nvoices, that quite frankly any eighth grade could recreate on a printer! However, in his defense, I already chastised the Auditor's [sic] for not being more "specific" on what they needed, (i.e. cancelled checks or bank statements showing the wires), from him. However, with him charging us for "Financial Services," they may have assumed what an auditor required, should be known by him?

Let me speak frankly, when you divert a million dollars a year, to an unproven entity to act on your behalf[,] there is going to be heightened scrutiny. You are smart enough to understand this. We are in the second year of million dollar losses, that nonprofit Board members may not fully comprehend? A Board's responsibility of "Duty of Care," will be questioned by outside reviewers.

I am speculating that the Plante & Moran Technical Reviewers came back to Mark and said just meet with BDC, since they failed to provide proof that these invoices are actually being paid. I think it is a simple solution that we should comply with. The alternative might be to see proof of payments on a sample of items?

So which might you prefer? I can go back to them with your preference. Or you can speak directly to them?

Let me know?

(Emphasis sic.)

{¶ 12} The following day, Austin responded to O'Donnell's email, copying Fayne, as follows:

Be very careful about the way you communicate with me, especially questioning my intelligence and/or ability to understand something you were not present to hear, question or response [sic]. Insolence seems to be something you hold in high regard. However[,] you are not going to address me any way you like without there being consequences. My concern about this whole process is the lack of specificity and the amount of time already expended, as though a fishing expedition is being conducted in order to discover more questions to ask. In all my years with this organization, I am not aware of one instance where a contractor or vendor of any kind was asked to produce proof of payment for invoices submitted of any amount.

As insulting as it may be to Arthur Fayne, I will present this latest request to him and see whether this eighth grader is willing to meet or provide proof of payment on some "sample of items." At any rate, you can advise the audit firm that I expect a draft to send to board members next week.

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