Food Lion, Inc. v. Capital Cities/Abc, Inc.

• Citation: 951 F.Supp. 1217
• Decision Date: 27 November 1996
• Docket Number: No. 6:92CV00592.,6:92CV00592.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: FOOD LION, INC., Plaintiff, v. CAPITAL CITIES/ABC, INC., ABC Holding Co., American Broadcasting Companies, Inc., Lynne Litt, Richard N. Kaplan, Ira Rosen and Susan Barnett, Defendants.

Page 1217

951 F.Supp. 1217

FOOD LION, INC., Plaintiff, v. CAPITAL CITIES/ABC, INC., ABC Holding Co., American Broadcasting Companies, Inc., Lynne Litt, Richard N. Kaplan, Ira Rosen and Susan Barnett, Defendants.

No. 6:92CV00592.

United States District Court, M.D. North Carolina, Winston-Salem Division.

November 27, 1996.

W. Andrew Copenhaver, David A. Shirlen, Elizabeth B. McGee, Winston-Salem, NC, John J. Walsh, New York City, Richard L. Wyatt, Jr., Washington, DC, for plaintiff.

H. Hugh Stevens, Jr., Jerry S. Alvis, Katherine A. O'Connor, Raleigh, NC, Randall Turk, William Jeffress, Jr., Washington, DC, Alan W. Duncan, Greensboro, NC, for defendants.

MEMORANDUM OPINION

TILLEY, District Judge.

This matter is before the Court on summary judgment motions by both parties. Defendants filed a Motion for Summary Judgment on Claims of Fraud, Trespass, Negligent Supervision and Civil Conspiracy [Doc. # 366]. Plaintiff filed a Motion for Summary Judgment as to the Third and Fourth Claims for Relief (Trespass and Respondent Superior for Trespass) [Doc. # 379]. For the reasons stated herein, both of these motions are DENIED.

I.

Defendants Lynne Litt¹ and Susan Barnett applied with Plaintiff Food Lion for employment as, respectively, a meat wrapper and a deli clerk. Both individuals, actually employed by ABC's news magazine program PrimeTime Live, falsified parts of their employment applications and omitted any reference to their true reasons for seeking employment. Both individuals were interested in working at Food Lion only in order to record footage of the deli and meat departments by using a hidden camera. Litt indicated that she had prior experience as a meat wrapper. She provided false references, a false employment background, and a false address. Barnett also provided false references, a false employment history, a false address and a false phone number. As a result of this application process, both Barnett and Litt were hired by Food Lion. Litt worked for Food Lion for 12 days. Barnett worked for Food Lion for 8 days.

II.

Summary judgment is proper only if there is no genuine issue as to any material fact. The moving party on a motion for summary judgment will have the burden of pointing to deficiencies in the record as to matters upon which the opposing party has the burden of proof such that the opposing party cannot prove its claim or defense or showing otherwise why, upon the undisputed facts in the record, the moving party is entitled to judgment as a matter of law. The party opposing the motion for summary judgment may not merely rest on its pleadings, but must provide evidence or point to evidence already in the record, properly authenticated pursuant to Rule 56(e), that would be sufficient to support a jury verdict in its favor. See Fed. R.Civ.P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14 91 L.Ed.2d 202 (1986); Orsi v. Kirkwood, 999 F.2d 86 (4th Cir.1993); Herold v. Hajoca Corp., 864 F.2d 317 (4th Cir.1988), cert. denied, 490 U.S. 1107, 109 S.Ct. 3159, 104 L.Ed.2d 1022 (1989).

It should be noted that resolution of the fraud and trespass claims is governed by the law of the "forum in which the acts giving rise to the claim occurred." Tatham v. Hoke, 469 F.Supp. 914, 916 (W.D.N.C.1979) (citing Charnock v. Taylor, 223 N.C. 360, 26 S.E.2d 911 (1943)), aff'd, 622 F.2d 587 (4th Cir.1980). Therefore, the claims involving Litt's alleged fraud and trespass will be governed by North Carolina law since she was employed by Food Lion in North Carolina. The claims involving Barnett's alleged fraud and trespass will be governed by South Carolina law since the actions giving rise to the claims occurred in that state.²

III.

A. Fraud

Defendants moved for summary judgment on Plaintiff's fraud claim. The parties do not dispute the elements of fraud in North Carolina: (1) false representation or concealment of a material fact; (2) reasonably calculated to deceive; (3) made with intent to deceive; (4) which does in fact deceive; (5) resulting in damage to the injured party. Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 323 N.C. 559, 374 S.E.2d 385, 391 (1988). South Carolina has similar requirements for a fraud action: (1) a representation; (2) the falsity of the representation; (3) the materiality of the representation; (4) knowledge of its falsity, or reckless disregard for its truth or falsity; (5) intent that the representation be acted upon; (6) the hearer's ignorance of the falsity; (7) the hearer's reliance on its truth; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximate injury. Hansen v. DHL Lab., Inc., 316 S.C. 505, 450 S.E.2d 624, 628 (Ct.App.1994), aff'd, 319 S.C. 79, 459 S.E.2d 850 (1995). Defendants contend that Plaintiff's claim must fail because Plaintiff can show no damages proximately resulting from the misrepresentations made by Litt and Barnett.

Plaintiff claims two distinct types of damages. The first type of damages involves losses and expenditures associated with events leading up to and the eventual broadcast of PrimeTime Live's story on Food Lion ["publication damages"]. The second type of damages are those associated with the hiring, training, and employment of Litt and Barnett and the costs associated with replacing them when each quit after only a few days on the job. The first type of damages, publication damages, is the subject of another motion currently pending with this court. Because the present issue can be resolved without reference to those damages, they will not be addressed further here.

Defendants claim that Plaintiff has no legally cognizable damages emanating from the misrepresentations made by Litt and Barnett. Defendants claim that Food Lion can not recover for the cost of hiring, training, and employing Litt and Barnett because work was received in return. Because the two were at-will employees who could be fired or could leave Food Lion's employ at any time, Defendants assert that the cost involved with replacing the employees was a cost Food Lion would have necessarily incurred regardless of Litt's or Barnett's reason for leaving.

In support of its contentions, Defendants offer cases where an employee was illegally discharged, the employer subsequently learned of the discharged employee's "resume fraud" or other wrongdoing, the employer claimed that the employee would have never been hired had the truth been known, and asserted the after-acquired evidence as a defense in the action for illegal dismissal. As Defendants note, courts have almost universally held that such a defense will not bar the discharged employee from all monetary damages. See, e.g., Russell v. Microdyne Corp., 65 F.3d 1229 (4th Cir.1995); Mardell v. Harleysville Life Ins. Co., 65 F.3d 1072 (3d Cir. 1995); Wallace v. Dunn Construction Co., 62 F.3d 374 (11th Cir.1995); Wehr v. Ryan's Family Steak Houses, Inc., 49 F.3d 1150 (6th Cir.1995); Shattuck v. Kinetic Concepts, Inc., 49 F.3d 1106 (5th Cir.1995). These cases are not applicable in this situation. The situation presented here, where Defendants Litt and Barnett misrepresented themselves and their backgrounds, accepted jobs with Food Lion when they were actually employed by ABC, and had goals in those positions far different from those normally associated with the jobs, is not analogous to a situation where a person is fired illegally and the employer-wrongdoer then attempts to avoid damages by claiming that the person would have never have been hired if the employer had known about the resume fraud or, in the case of wrongdoing during the time of employment, that the person would have been fired anyway. In the employment cases, there are important deterrence principles embodied in the various statutes typically involved in those claims which would be frustrated if employers were allowed to escape damage obligations based on evidence acquired after the wrongful act. The Supreme Court noted that "[t]he ADEA and Title VII share common substantive features and also a common purpose: `the elimination of discrimination in the workplace.' Congress designed the remedial measures in these statutes to serve as a `spur or catalyst' to cause employers `to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges' of discrimination." McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, ___, 115 S.Ct. 879, 884, 130 L.Ed.2d 852 (1995) (citations omitted). The Court went on to say that "[i]t would not accord with this scheme if after-acquired evidence of wrongdoing that would have resulted in termination operates, in every instance, to bar all relief for an earlier violation of the Act." Id. The situation in the present case does not present similar concerns. In fact, if summary judgment were granted on this issue under Defendants' reasoning, the message attached to the ruling would be that perspective at-will employees could lie with impunity in order to obtain a position.

The issue of publication damages aside, there is enough evidence that Plaintiff was damaged by the employment costs associated with employing and replacing Defendants Litt and Barnett to allow Plaintiff to get to the jury on this issue. At least one court has noted that "if the employer has somehow been damaged by the plaintiff's misrepresentations or misconduct on the job, it may seek its own damages where appropriate." Massey v. Trump's Castle Hotel & Casino, 828 F.Supp. 314, 323 (D.N.J.1993). It is up to the jury to examine the employment relationship and determine whether such damage occurred. The Court can not say, as a matter of law, that it did not.

B. Trespass

Both parties have filed motions for summary judgment on the trespass claim. Defendants assert that Plaintiff consented to the entry of Litt and Barnett and that this consent prevents success on the trespass claim. Plaintiff claims that Litt and Barnett lacked Food...