Korlin v. Chartwell Health Care, Inc.

• Decision Date: 31 January 2001
• Docket Number: No. 4:97CV2040 SNL.,4:97CV2040 SNL.
• Citation: 128 F.Supp.2d 609
• Parties: Florine KORLIN, Plaintiff, v. CHARTWELL HEALTH CARE, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

128 F.Supp.2d 609

Florine KORLIN, Plaintiff, v. CHARTWELL HEALTH CARE, INC., et al., Defendants.

No. 4:97CV2040 SNL.

United States District Court, E.D. Missouri, Eastern Division.

January 31, 2001.

James G. Nowogrocki, St. Louis, MO, for plaintiff.

Ronald R. Payne, Hesse and Jones, Dallas, TX, Terry A. Bond, Partner, Frankel and Rubin, Clayton, Joseph H. Guffey, Sonni L. Fort, Husch and Eppenberger, St. Louis, MO, for defendants.

MEMORANDUM OPINION

LIMBAUGH, Senior District Judge.

This matter is before the Court on defendant Colonial Pavilion's motion to dismiss for lack of jurisdiction over the subject matter¹ and for summary judgment (# 53) and defendant Leland Health Care's motion for judgment on the pleadings (# 71). Plaintiff filed suit against Chartwell Health Care, Inc. and Colonial Nursing Center, Inc. for violation of the Age Discrimination in Employment Act (ADEA) and the Missouri Human Rights Act (MHRA). Plaintiff added Colonial Pavilion, L.L.C. and Leland Health Care, L.L.C. as defendants under the theory of successor liability.

Standard of Review

I. Summary Judgment

Courts have repeatedly recognized that summary judgment is a harsh remedy that should be granted only when the moving party has established his right to judgment with such clarity as not to give rise to controversy. New England Mut. Life Ins. Co. v. Null, 554 F.2d 896, 901 (8th Cir.1977). Because discrimination cases often turn on inferences rather than on direct evidence, the Courts are particularly deferential to the non-movant. Crawford v. Runyon, 37 F.3d 1338, 1341 (8th Cir. 1994). Therefore, summary judgment should seldom be used in an employment-discrimination case. Id. at 1341. However, summary judgment motions "can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts' trial time for those that really do raise genuine issues of material fact." Mt. Pleasant v. Associated Elec. Coop., Inc., 838 F.2d 268, 273 (8th Cir. 1988).

Pursuant to Federal Rule of Civil Procedure 56(c), a district court may grant a motion for summary judgment if all the information before the court demonstrates that "there is no genuine issue as to a material fact and the moving party is entitled to judgment as a matter of law." Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962). The burden is on the moving party. Mt. Pleasant, 838 F.2d at 273. After the moving party discharges this burden, the nonmoving party must do more than show that there is some doubt as to the facts. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Instead, the nonmoving party bears the burden of setting forth specific facts showing that there is sufficient evidence in its favor to allow a jury to return a verdict for it. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

In passing on a motion for summary judgment, the court must review the facts in a light most favorable to the party opposing the motion and give that party the benefit of any inferences that logically can be drawn from those facts. Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983). The court is required to resolve all conflicts of evidence in favor of the nonmoving party. Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 210 (8th Cir.1976).

II. Judgment on the Pleadings

Judgment on the pleadings is proper when the moving party clearly shows there are no material factual issues and the moving party is entitled to judgment as a matter of law. Franklin High Yield Tax-Free Income Fund v. County of Martin, Minn., 152 F.3d 736, 738 (8th Cir.1998). The Court accepts as true all facts pleaded by the non-moving party and grants all reasonable inferences from the pleadings in favor of the non-moving party. United States v. Any and all Radio Station Transmission Equip., 207 F.3d 458, 462 (8th Cir.2000). The Court generally must ignore materials outside the pleadings, but it may consider some materials that are part of the public record or do not contradict the complaint, as well as, materials that are "necessarily embraced by the pleadings." Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir.1999). The Court should grant the motion only if it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir.1990).

Background

Colonial Nursing Center, Inc. (Colonial Nursing) is a subsidiary of Chartwell Health Care, Inc. (Chartwell). Colonial Nursing operated a nursing home at 894 Leland in University City, Missouri where the plaintiff worked from 1972 to 1996. Colonial Healthcare Center, Inc. (Colonial Healthcare) owns the real estate where the nursing home sits. Plaintiff claims she was constructively discharged on September 16, 1996, as a result of a hostile work environment with regard to her age. On October 3, 1997, plaintiff filed her Complaint naming Chartwell and Colonial Healthcare as defendants. On October 17, 1997, plaintiff realized she had made a mistake and filed a First Amended Complaint which termed Colonial Healthcare and added Colonial Nursing as a defendant. In late July of 1998, defendants Colonial Nursing and Chartwell abandoned the nursing home, and the State of Missouri appointed Colonial Healthcare, the owner of the real estate, as emergency receiver.

Morris Esformes, a principal shareholder in Colonial Healthcare and the individual who ran the operations for the receiver, contacted Colonial Pavilion, L.L.C. (Pavilion) to inquire as to whether it would be interested in subleasing the facility at 894 Leland and operating it as a nursing home. Negotiations ensued between Colonial Healthcare, the receiver, and Pavilion. Neither Chartwell, nor Colonial Nursing participated in negotiations as they had already abandoned the property. Pavilion agreed to operate the nursing home and entered a sublease agreement with Colonial Healthcare. The sublease was contingent upon Pavilion receiving a license from the Missouri Department of Social Services, Division of Aging. Due to the exigent circumstances, there was also a Management Agreement between Colonial Healthcare, as receiver, and Pavilion which was to terminate as of the date Pavilion obtained a Temporary Operating Permit from the Department of Social Services.

Pavilion agreed to pay the employees of the nursing home the last payroll in July because Chartwell and Colonial Nursing had failed to do so, and everyone was concerned that the employees would quit. Pavilion officially began operating the nursing home on August 14, 1998. Pavilion immediately terminated the previous medical director and entered an agreement with Long Term Care Physicians, naming a new doctor as medical director. On August 29, 1998, Pavilion terminated the previous administrator, previous director of nurses, three L.P.N.'s, and an office employee, and hired new employees to take their places. Pavilion also terminated the housekeeping supervisor and the marketing supervisor on August 15, 1998, and promoted someone to housekeeping supervisor and hired someone new to be marketing supervisor. By October 15, 1998, over half of Chartwell's employees at the nursing home had been terminated, and new employees had been hired by Pavilion to replace them.

On October 5, 1998, Chartwell had an involuntary Chapter 7 Bankruptcy Petition filed against it, and as a result, on November 3, 1998, the proceedings were stayed. Plaintiff then filed a Second Amended Complaint on November, 16, 1998, adding Pavilion as a defendant. The members of Pavilion claim they had no notice or knowledge of plaintiff's claim until they received a copy of the Complaint naming Pavilion as a defendant. Mark Rubin was the registered agent for Colonial Healthcare, the owner of the real estate, and the company that was inadvertently sued by plaintiff originally in October 1997 before it was dismissed two weeks later. Therefore, he received the original copy of the Complaint while acting as Colonial Healthcare's registered agent. He was also the registered agent of Pavilion which was formed on August 4, 1998, immediately prior to it taking over the nursing home.

Then, on April 24, 1999, Pavilion, Leland Healthcare, L.L.C. (Leland), and Colonial Healthcare entered into a Sublease Termination Agreement whereby Leland took over operation of the nursing home in place of Pavilion. Pursuant to the Sublease Termination Agreement, Pavilion retained any and all assets, including accounts receivable for the time period before April 24, 1999. The agreement also included specific provisions for "No Assumption of Liabilities" and "Indemnifications" for Leland. Pavilion represented in the Agreement that it had no knowledge of "any reasonable basis for any claim" against it for violation of the ADEA.

On January 5, 2000, plaintiff added Leland as a defendant in her Third Amended Complaint. Leland claims it had no knowledge of plaintiff's lawsuit prior to receiving plaintiff's Complaint. Morris Esformes is one of three owners of Leland. He is also a limited partner in Colonial Healthcare, the owner of the real estate, and the company that was inadvertently sued by plaintiff only to be dismissed soon thereafter.

Discussion

Plaintiff filed its lawsuit against Pavilion and Leland based on a successor liability theory. The United States Supreme Court has applied the doctrine of successor liability in unfair labor practices under the National Labor Relations Act (NLRA). Howard Johnson Co., Inc. v. Detroit Local Joint Executive Bd., 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974); Golden State Bottling Co., Inc. v. National Labor Relations Board, 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973). Although the...