Lemmon v. Ayres

• Citation: 860 F.Supp.2d 489
• Decision Date: 16 March 2012
• Docket Number: Case No. 3:09–CV–361.
• Parties: Patti LEMMON, Plaintiff, v. Richard AYRES, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

860 F.Supp.2d 489

Patti LEMMON, Plaintiff,

v.Richard AYRES, et al., Defendants.

Case No. 3:09–CV–361.

United States District Court,

S.D. Ohio,

Western Division at Dayton.

March 16, 2012.

Scott Allen Kelly, Troy, OH, for Plaintiff.

Katherine Connor Ferguson, Kegler Brown Hill & Ritter, Loriann E. Fuhrer, Lawrence Francis Feheley, Olumbus, OH, for Defendants.

ENTRY AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (Doc. # 26) AND TERMINATING THIS CASE

THOMAS M. ROSE, District Judge.

The Complaint in this matter was originally filed in the Court of Common Pleas of Clark County, Ohio by Plaintiff Patti Lemmon (“Lemmon”). It was subsequently removed to this Court by Defendants Richard Ayres (“Ayres”) and Ayres Accounting Company (“Ayres Accounting”) based upon this Court having federal question jurisdiction over at least one of Lemmon's Causes of Action. ¹ (Doc. # 1.)

Lemmon brings fifteen (15) claims as a result of her relationship with Ayres and Ayres Accounting. Her First Cause of Action is for breach of an oral agreement. Her Second Cause of Action is for unjust enrichment. Her Third Cause of Action is for promissory estoppel. Her Fourth Cause of Action is for negligent misrepresentation. Her Fifth Cause of Action is for negligent concealment of facts. Her Sixth Cause of Action is for fraudulent misrepresentation of facts. Her Seventh Cause of Action is for fraudulent concealment of facts. Her Eighth Cause of Action is for intentional infliction of emotional distress (“IIED”). Her Ninth Cause of Action is for assault and her Tenth Cause of Action is for battery. Her Eleventh Cause of Action is for sexual harassment. Her Twelfth Cause of Action is for failure to pay overtime wages as required by the Fair Labor Standards Act (“FLSA”). Her Thirteenth Cause of Action is for failure to pay overtime wages as required by Ohio Revised Code § 4113.03. Her Fourteenth Cause of Action is against Ayres Accounting for vicarious liability, and her Fifteenth Cause of Action is against Ayres Accounting for negligent training and/or supervision.

Now before the Court is a Motion for Summary Judgment made by Ayres and Ayres Accounting. (Doc. # 26) This Motion is now fully briefed and ripe for decision. A relevant factual background will first be set forth followed by the standard of review for motions for summary judgment and an analysis of the Motion.

RELEVANT FACTUAL BACKGROUND

For purposes of a motion for summary judgment, the Court views the facts in a light most favorable to the non-moving party, Lemmon in this case. A brief description of the Parties will be followed by a description of the Parties' professional and personal relationships.

The Parties

Lemmon

Lemmon is a resident of Champaign County, Ohio. (Deposition of Patti Lemmon (“Lemmon Dep.”) 5, January 25, 2011.) She was employed by Ayres Accounting from July of 1998 to November of 2008 as a staff accountant. (Lemmon Dep. at 23, 39; Deposition of Richard Ayres (“Ayres' Dep.”) 45, August 25, 2011.) In addition to her employment at Ayres Accounting, Lemmon served as manager of Ayres' Subway franchise from October of 2005 to October of 2008. (Lemmon Dep. at 30, 57.) Lemmon divorced in 2008 and was unmarried thereafter. ( Id. at 13.)

Lemmon's duties at Ayres Accounting included keeping accounting records, preparing financial reports, and preparing, and amending when necessary, all types of tax returns for certain clients. (Lemmon Dep. 26; Ayres Dep. 29.) All of the clients assigned to her considered Lemmon to be their primary contact for Ayres Accounting. (Lemmon Dep. 29; Ayres Dep. 29–30.) Her work at Ayres Accounting also included various ancillary duties, such as organizing seminars and overseeing some operations at a carryout Mr. Ayres owned. (Ayres Dep. 29–31; Lemmon Dep. 25–35.) Lemmon normally performed these ancillary duties during her normal work hours of 8:30 a.m.–5:00 p.m. daily. (Ayres Dep. 28, 38.)

Lemmon occasionally worked at Ayres' Subway outside of her normal hours at Ayres Accounting including Saturdays and Sundays. (Lemmon Dep. 49–51, 202; Ayres Dep. 51–55.) Lemmon did not document all of her time working at the Subway franchise and on one occasion, in the middle of October of 2008 which is toward the end of her employment, she informed Ayres that compensation would be necessary. (Lemmon Dep. 209.)

Ayres asserts that Lemmon was compensated for all these various duties through her wages at Ayres Accounting. (Ayres Dep. 27–28.) In some instances, Lemmon worked less than her normal forty hours in a week. (Lemmon Dep. 236.) However, regardless of the deficiency, Lemmon was compensated for a full forty hours. ( Id.)

Ayres compensated Lemmon for the extra efforts through the bonuses, a retirement plan, and an increase in base salary. (Ayres Dep. 58.) Ayres also compensated Lemmon for the extra efforts by reducing the rent that she was paying him for a property that she lived in by approximately $150 per month. (Ayres Dep. 58; Lemmon Dep. 141.)

Early on during her employment at Ayres Accounting, Lemmon was paid on an hourly basis. (Affidavit of Richard E. Ayres (“Ayres Aff.”) Sept. 21, 2011.) Starting from 2006, Lemmon was paid on a salary basis. ( Id.)

Between October of 2005, when the Subway opened, and October of 2008, Ayres paid Lemmon the equivalent of eighty hours per pay period even when Lemmon recorded less than eighty hours. (Lemmon Dep. 243–44. Ayres Dep. 118.) Lemmon eventually sought additional compensation in October of 2008 when the relationship between her and Ayres had fizzled. (Lemmon Dep. 209.)

Ayres

Ayres is a resident of the Clark County, Ohio. (Ayres Dep. 4, 6.) He is the owner and a shareholder of Ayres Accounting & Company. ( Id. at 19, 21.) At all times relevant herein, Ayres owned a Subway franchise in North Hampton, Ohio, in the name of Richard E. Ayres, LLC. ( Id. at 19, 21.) He also has several rentals and presents tax seminars each fall called Ayres Tax Seminars (“ATS”). ( Id. at 20.) Finally, Ayres was previously divorced and is currently married since 1964. ( Id. at 7.)

Ayres Accounting

Ayres Accounting is a business started by Ayres in 1966 and located in North Hampton, Ohio. ( Id. at 13–14.) Ayres Accounting has four shareholders: Ayres, his spouse, and his two daughters. ( Id. at 21.) The company provides financial services including preparation of tax and financial reports, management advisory services, and accounting related functions. ( Id. at 14.) Ayres Accounting employs various individuals who perform different functions for the company. ( Id. at 16–19.)

The Relationships

Prior to opening the Subway franchise, Ayres discussed the prospect of owning and opening a franchise with Lemmon. (Ayres Dep. 22; Lemmon Dep. 31.) In order to become well versed in the managementof the Subway franchise, Lemmon attended classes at the national headquarters of Subway in Connecticut to be certified as a Subway manager. (Ayres Dep. 25; Lemmon Dep. 32.) Lemmon was provided her normal weekly pay for attending the class through Ayres Accounting. (Ayres Dep. 26.) She was also reimbursed for the class fee and other travel expenses. ( Id. at 26.)

The Subway was opened on October 7, 2005, and Lemmon took on general duties as the Manager. (Ayres Dep. 22–23; Lemmon Dep. 31–32; 38.) Lemmon was responsible for overseeing the operations of the Subway franchise. (Ayres Dep. 24, Lemmon Dep. 49–51.) Her duties included the hiring and firing of employees, taking care of purchases and supplies, and other ancillary duties specific to the Subway business. ( Id.) Lemmon had sole decision-making authority and discretion in her responsibilities as the manager of the Subway franchise. (Lemmon Dep. 55–57.)

Sometime after the opening of the Subway, Ayres promised Lemmon that he would someday transfer the property that the Subway franchise was on to her. (Ayres Dep. 64; Lemmon Dep. 74–75.) In her deposition, Lemmon discusses gifting of the Subway. (Lemmon Dep. 82.) In his deposition, Ayres discusses gifting of the property upon which the Subway was located. (Ayres Dep. 64.) Lemmon testified that, at the time the promise was made, there was no discussion about additional compensation for her work at the Subway. (Lemmon Dep. 85.)

At the time he made this promise, Ayres' intent was to gift the Subway to Lemmon regardless of whatever may or could potentially transpire in their personal relationship. (Ayres Dep. 65; Lemmon Dep. 82.) On or about June of 2006, to solidify his intentions of taking care of Lemmon as gratitude for her dedication and in hopes of a long-term relationship, Ayres made out a will where he bequeathed the Subway real estate to Lemmon upon his death. (Ayres Dep. 66–68; Lemmon Dep. 81.) Since then, Ayres has revoked the clause in his will that gave the Subway real estate to Lemmon. (Ayres Dep. 66.)

Lemmon questioned whether Ayres intended to give the Subway to her. (Lemmon Dep. 149.) Sometime after the Subway opened, acting on the advice of her financial advisor, Lemmon approached Ayres about the possibility of having the first option to purchase the real estate in the event of a sale. (Ayres Dep. 71; Lemmon Dep. 79–80.) Ayres refused Lemmon's request and Lemmon never inquired further. (Ayres Dep. 71; Lemmon Dep. 79, 149–52.) Lemmon's uncertainty regarding Ayres' intent was based on Ayres' refusal of her purchase offer and his continuing relationship with his wife. (Lemmon Dep. 152, 160–61.) Thereafter, Lemmon continued working at the Subway franchise and eventually stopped managing the Subway franchise in October of 2008. ( Id. at 57.)

Sometime during Lemmon's employment, she and Ayres began a romantic relationship. (Lemmon Dep. 59–62. Ayres Dep. 94.) There is conflicting testimony as to whether the relationship began before or after the opening of the Subway franchise.² (Lemmon Dep. 59–61; Ayres Dep. 96.) During the course of the romantic relationship, both Ayres and Lemmon engaged in consensual physical contact. (Lemmon ...