Guerrero v. J.W. Hutton, Inc., 4:04 CV 40005.

Decision Date31 May 2005
Docket NumberNo. 4:04 CV 40005.,4:04 CV 40005.
Citation373 F.Supp.2d 948
PartiesMarcie GUERRERO, Plaintiff, v. J.W. HUTTON, INC., Defendant.
CourtU.S. District Court — Southern District of Iowa

Gordon R. Fischer, Bradshaw Fowler Proctor & Fairgrove, Des Moines, IA, for Plaintiff.

Jo Ellen Whitney, Heather Lee Palmer, Davis Brown Koehn Shors & Roberts, Patricia A. Shoff, Belin Lamson McCormick Zumback & Flynn, P.C., Des Moines, IA, for Defendant.

ORDER

GRITZNER, District Judge.

This matter is before the Court on Plaintiff's Motion for Partial Summary Judgment and Defendant's cross Motion for Partial Summary Judgment. The parties moved for partial summary judgment on February 10, 2005. Hearing was held on the matter on May 3, 2005. Plaintiff was represented by Gordon Fischer. Defendant was represented by Heather Palmer. The matter is now fully submitted for review. For the reasons discussed below, Defendant's Motion for Partial Summary Judgment is granted. Plaintiff's Motion for Partial Summary Judgment is denied.

I. FACTS

Plaintiff Marcie Guerrero ("Guerrero") was employed as a subrogation analyst with Defendant J.W. Hutton, Inc. ("J.W.Hutton"), from March of 2002 until her employment was terminated on June 27, 2003. When Guerrero was hired, she signed the following covenant-not-to-compete:

I do hereby covenant and agree that as a term and consideration of my employment with J.W. Hutton, Inc. that at no time during the term of this employment or for three (3) years immediately following termination thereof (regardless of whether such termination is voluntary or involuntary) will I, for myself or in behalf of any other person, partnership, corporation or company, engage in any business activities involving the insurance recovery service within 300 miles of any branch office of J.W. Hutton, Inc. nor will I directly or indirectly for myself or in behalf of, or in conjunction with, any other person, partnership, corporation, or company solicit or attempt to solicit the business or patronage of any person, partnership, corporation, or company for the purpose of selling a service for the recovery of accounts receivables, claim overpayments or subrogation claims or such other incidental business and service now engaged in by J.W. Hutton, Inc. nor will I disclose to any person whatsoever, any of the secrets, methods, systems, client lists, rate charts or other confidential information used by J.W. Hutton, Inc. in and about its business.

Exhibit "A" to Defendant's Answer and Counterclaim.

Both parties agree that during her employment Guerrero independently managed subrogation files for clients of J.W. Hutton. When a file arrived from a client, Guerrero would review the file, which normally contained a police report, the itemized damages, any available statements, and additional information obtained from the client concerning the claim. After reviewing this information, Guerrero would determine the responsible party and contact the insurance company for the responsible party, the responsible party's attorney, or the responsible party themself. When dealing with an insurance company for a responsible party, Guerrero would normally contact an adjuster for the insurance company and request a settlement offer for the client. After obtaining an offer, Guerrero would then analyze the information in the file and then contact the client and make a settlement recommendation to the client. Guerrero was responsible for continuing to work on settling the claim, and if she determined settlement was unlikely, she would recommend to the client that the client proceed with litigation.

When dealing with a responsible party or their attorney, Guerrero negotiated directly with the responsible party or their attorney to obtain a settlement offer. After obtaining an offer, Guerrero would evaluate whether the client would be able to enforce a judgment against the responsible party by reviewing their assets, including but not limited to whether the responsible party owned a home or other real estate, as well as information regarding their employment. Guerrero would then advise the client whether or not to pursue the claim and if so would recommend a settlement amount or proceed with litigation. During her investigations, Guerrero sometimes identified other responsible third parties. After conducting an asset search, Guerrero would recommend to the client whether to pursue the other responsible third parties through settlement or litigation.

J.W. Hutton contends that between March and June 2003, it received complaints that Guerrero was engaging in unprofessional, threatening, and harassing behavior with respect to the public at work. A notation log documenting events that occurred on June 11 and June 24, 2003, suggests that Guerrero may have been releasing confidential information regarding litigation to improper parties. Defendant's Appendix, p. 8.

On Friday, June 27, 2003, while Guerrero was on vacation, Julie Bintner, J.W. Hutton's President, learned from several other J.W. Hutton employees that Guerrero was interviewing for a position with Ingenix, a competitor of J.W. Hutton. This interview may have violated the covenant-not-to-compete Guerrero signed with J.W. Hutton. J.W. Hutton states that as a result of the complaints and Guerrero's meeting with a competitor in violation of the covenant-not-to-compete, Guerrero was terminated from employment on June 27, 2003. Guerrero argues that she was on vacation on June 27, 2003, and was terminated the following Monday, June 30, 2003.

On July 16, 2003, counsel for Guerrero sent the following letter to J.W. Hutton:

I am writing on behalf of Marcie Guerrero, who was terminated from her employment effective June 27, 2003. As you are aware, the Subrogation Department earned a quarterly bonus which was due at the end of June. As my client worked nearly the entire quarter, I believe under the Iowa Wage Payment Collection Act, she is entitled to this bonus.

Defendant's Appendix, p. 6. There is no dispute that Guerrero was not paid a quarterly bonus for the quarter ending June 30, 2003. J.W. Hutton paid its employees bonuses based primarily on rewarding longevity, attendance, and ethics. Bonuses are calculated on the last working day of the quarter, and the bonus policy explicitly states that an employee must be employed through the last working day of the quarter in order to be eligible for a bonus. As a result of the July 16 letter from counsel, J.W. Hutton's bonus review committee met to discuss Guerrero's eligibility for a bonus under the bonus policy. On July 22, 2003, J.W. Hutton sent the following response to counsel for Guerrero:

Pursuant to request from Attorney Gordon R. Fischer in behalf of Marcie Guerrero, the bonus review committee met to discuss eligibility and termination requirements. These concerns involved an interpretation/review of the eligibility and termination clauses within the current bonus plan at J.W. Hutton, Inc. The following clauses were reviewed:

Clause "Definition of Eligibility" 2a on page 1. If the employee is detrimentally affecting the company (i.e. breaking the code of work ethics forthright in the employee handbook) at any time during the bonus quarter, the employee loses the bonus.

Clause "Termination Eligibility" on page 3. Termination of employment by the employer or by the employee will apply to the bonus plan as follows: 1. An employee must be employed through the last working day of the quarter to be eligible for the bonus.

A unanimous decision to not allow deviation was based upon the above clauses. Therefore, no bonus is due to Marcie Guerrero for the period ending June 30, 2003.

Defendant's Appendix, p. 5.

On November 19, 2003, Guerrero filed suit in Iowa District Court for Madison County. Guerrero asserted two counts, one for failure to compensate her for overtime arising under the Fair Labor Standards Act and one for failure to pay her a bonus arising under the Iowa Wage Payment Collection Act. On January 5, 2004, J.W. Hutton removed the action to the United States District Court for the Southern District of Iowa pursuant to 28 U.S.C. §§ 1441 and 1446. J.W. Hutton responded to Guerrero's Complaint, asserting that under the terms of its bonus policy, Guerrero was not entitled to a bonus and that Guerrero was an exempt administrative employee and thus not entitled to overtime under the FLSA. J.W. Hutton also filed a counterclaim against Guerrero stemming from her violation of the covenant-not-to-compete she signed. Guerrero denies she breached the covenant-not-to-compete.

On February 10, 2005, Guerrero filed a Motion for Partial Summary Judgment. Guerrero requests the Court enter summary judgment in her favor with respect to her claim for violation of the Fair Labor Standards Act. Guerrero asserts that the record evidence is clear that she was not an administrative employee within the meaning of the FLSA and is therefore entitled to overtime pay.

J.W. Hutton resists Guerrero's motion, via its own cross motion for summary judgment filed on February 10, 2005. J.W. Hutton asserts that the Court should deny Guerrero's FLSA claim and enter judgment as a matter of law in favor of J W. Hutton because Guerrero was an exempt administrative employee during her employment with J.W. Hutton. In addition, J.W. Hutton contends that it is entitled to summary judgment with respect to Guerrero's claim for a bonus under Iowa Code Chapter 91A because she was not eligible for the bonus given she was not employed through the last working day of the second quarter of 2003.

II. APPLICABLE LAW AND DISCUSSION
A. Standard of Review

"[C]laims lacking merit may be dealt with through summary judgment under Rule 56." Swierkiewicz v. Sorema, 534 U.S. 506, 122 S.Ct. 992, 998-999, 152 L.Ed.2d 1 (2002). Summary judgment is a drastic remedy, and the Eighth Circuit has recognized that it "must be exercised with extreme care to prevent taking genuine issues of fact away from juries."...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT