Kephart v. Data Systems Intern., Inc., CIV. A.01-2533-KHV.

• Citation: 243 F.Supp.2d 1205
• Decision Date: 16 January 2003
• Docket Number: No. CIV. A.01-2533-KHV.,CIV. A.01-2533-KHV.
• Parties: Scott KEPHART, et al., Plaintiffs, V. DATA SYSTEMS INTERNATIONAL, INC., Defendant.
• Court: U.S. District Court — District of Kansas

243 F.Supp.2d 1205

Scott KEPHART, et al., Plaintiffs,

V.

DATA SYSTEMS INTERNATIONAL, INC., Defendant.

No. CIV. A.01-2533-KHV.

United State District Court, D. Kansas.

January 16, 2003.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Frank B. W. McCollum, Stacy M. Murrow, McCollum & Parks, L.C, Kansas City, MO, for Plaintiffs.

William C. Martucci, Stacey A. Campbell, Shirley E. Goza, Shook, Hardy & Bacon, L.L.P., Kansas City, MO, for Defendant.

MEMORANDUM AND ORDER

VRATIL, District Judge.

Scott Kephart, Harold Distler, John Winger, Darrell Robinson, Robert Babich, Mark Hernandez, Scott Strange and James Rubino bring claims against Data Systems International, Incorporated ("DSI") for violation of the Worker Adjustment And Retraining Notification Act ("WARN Act"), 29 U.S.C. § 2101 et seq., in connection with the termination of their employment. Distler, Winger, Babich, Strange and Rubino also assert claims for breach of contract and quantum meruit, and Distler, Winger and Babich assert additional claims for violation of the Kansas Wage Payment Act, K.S.A. §§ 44-315(a) and 44-344(a).

This matter is before the Court on Defendant Data Systems International, Inc.'s Motion For Summary Judgment (Doc. # 39) filed July 12, 2002 and Plaintiffs' Motion For An Evidentiary Hearing Or In The Alternative For Leave To Respond To Defendant's Reply To Plaintiffs [sic] Brief In Opposition To Summary Judgment (Doc. # 60) filed September 16, 2002. For reasons stated below, the Court sustains defendant's motion in part and overrules plaintiffs' motion.

Summary Judgment Standard

The usual and primary purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct, 2505, 91 L.Ed.2d 202 (1986); Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir.1993). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A "genuine" factual dispute requires more than a mere scintilla of evidence. Id. at 252, 106 S.Ct. 2505.

The moving party bears the initial burden of showing the absence of any genuine issue of material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548; Hicks v. City of Watonga, Okla., 942 F.2d 737, 743 (10th Cir.1991). Once the moving party meets its burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial "as to those dispositive matters for which it carries the burden of proof." Applied Genetics Int'l, Inc. v. First Affiliated Sees., Inc., 912 F.2d 1238, 1241 (10th Cir.1990); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir.1991). The non-moving party may not rest on its pleadings but must set forth specific facts. Applied Genetics, 912 F.2d at 1241.

The Court must view the record in a light most favorable to the party opposing summary judgment. See Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir.1991). Summary judgment may be granted if the non-moving party's evidence is merely colorable or is not significantly probative. See Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505. "In a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion, and may not escape summary judgment in the mere hope that something will turn up at trial." Conaway v. Smith, 853 F.2d 789, 794 (10th Cir.1988). Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505.

The Court may only consider evidence whose content or substance is admissible. See Conoco Inc. v. J.M. Huber, 148 F.Supp.2d 1157, 1166 (D.Kan.2001); see also Gross v. Burggraf Const. Co., 53 F.3d 1531, 1541 (10th Cir.1995). "Hearsay testimony that would be inadmissible at trial may not be included." Conoco, 148 F.Supp.2d at 1166. "A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter." Fed.R.Evid. 602. Statements not based on personal knowledge must be disregarded. "To survive summary judgment, `nonmovant's affidavits must be based upon personal knowledge and set forth facts that would be admissible in evidence; conclusory and self-serving affidavits are not sufficient.'" Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir.1995).

Initially, the Court must address DSI's motion to strike portions of the affidavit of Mark Hernandez for non-compliance with Fed.R.Civ.P. 56(e).¹ DSI asserts that the affidavit includes information of which Hernandez lacks personal knowledge, and that it is self-serving and conclusory. "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e). To enforce this rule, the Court will not strike the affidavit but shall simply disregard those portions which are not shown to be based upon personal knowledge. See Chambless v. Masters, Mates & Pilots Pension Plan, 571 F.Supp. 1430, 1459 (S.D.N.Y.1983).

Hernandez was director of DSI's southwest region, and he supervised William Allen, Daniel Ellis, Darrell Robinson, Steven Robinson and Paul Jonas. He worked for DSI from July of 1994 through April 30, 2001. To the extent that his affidavit relates to his job position and supervisory duties, it is presumably based upon personal knowledge. The affidavit, however, does not explain how or why Hernandez would have personal knowledge on other subjects. To that extent, Hernandez's affidavit shall be disregarded.² See Fed.R.Evid. 602 & 701; PAS Comm Inc. v. Sprint Corp., 139 F.Supp.2d 1149, 1174 (D.Kan.2001).

Factual Background

The following facts are either undisputed or, where disputed, construed in the light most favorable to plaintiffs:

I. DSI And Its Employees

DSI is an "employer" under the WARN Act.³ It sells computer-related services, programs and equipment, and has its corporate headquarters in Overland Park, Kansas ("the Overland Park site"). Before April 30, 2001, DSI sold computer systems for original equipment manufacturers such as IBM and Hewlett Packard, created and marketed its own proprietary products and provided technical and consulting services. In 2000 and 2001, DSI told employees that its gross margins were lower on commodity hardware sales than on other products and that as a result of its performance, it had to cut expenses. DSI terminated certain groups of employees in December of 2000 and on April 30, 2001, it terminated 87 additional employees nationwide.⁴ DSI told most of these employees that the reason for termination was "restructuring at DSI," in that management had decided to "get out of the commodity hardware reselling business." Brief In Opposition (Doc. # 51) at 39. Specifically, DSI stated that:

[f]aced with a tough economy and a significant drop in hardware revenues, the Company has decided to accelerate our strategic plan to become focused on the profitable segments of our software and services lines of business. As a result, the Company is eliminating those positions associated with hardware sales and support and those segments of our services business deemed non-strategic.

Appendix F to Plaintiffs' Interrogatories in Exhibit A in Brief In Opposition (Doc. #51).

The Overland Park site, consists of two buildings which have the same mailing address. On April 30, 2001, the site had 262 employees. Of the 87 employees whom DSI terminated nationwide on that date, 46 were assigned to the Overland Park site.⁵ The parties disagree whether any of the remaining 41 employees were assigned to Overland Park. Plaintiffs assert that in all, DSI terminated 59 employees at that site—46 who the parties agree were assigned to Overland Park, plus 13 others. Brief In Opposition (Doc. # 51) at 42. DSI did not provide WARN Act notices to any of the terminated employees.

A. DSI Organization

DSI has regional headquarters offices in Illinois, Connecticut, Georgia and California In addition, DSI has leased regional office space in Overland Park, Kansas, Oak Brook, Illinois, Bloomington, Minnesota, Dallas, Texas, Danbury, Connecticut and Houston, Texas. DSI also has employees who work directly out of designated work spaces in their homes, and it generally provides all equipment, furniture and phone lines which are necessary for these home offices.

According to Hernandez, DSI had four principal operating units from January to April 2001: Wireless (Data Collection), Commodity Hardware Reselling ("CHR"), Software, and Services. Hernandez Affidavit, U 151, Exhibit 1 in Vol. II Brief In Opposition (Doc. # 51). According to DSI's organizational chart, however, DSI was divided into four "essential" divisions on April 26, 2001: finance and support, sales and marketing, client services and technology development.⁶ The organizational chart does not reflect the products and services or the functions of the persons whom it identifies, but it does indicate that divisions were divided into subdivisions. Under client services, for example, DSI had a subdivision titled "CRM, business development" with six employees at the Overland Park...