Lloynd v. Hanover Foods Corp.

• Decision Date: 17 November 1999
• Docket Number: No. Civ.A. 98-63 GMS.,Civ.A. 98-63 GMS.
• Parties: Heather LLOYND, Plaintiff, v. HANOVER FOODS CORPORATION, a Pennsylvania Corporation, Defendant.
• Court: U.S. District Court — District of Delaware

72 F.Supp.2d 469

Heather LLOYND, Plaintiff, v. HANOVER FOODS CORPORATION, a Pennsylvania Corporation, Defendant.

No. Civ.A. 98-63 GMS.

United States District Court, D. Delaware.

November 17, 1999.

William W. Pepper Sr., Schmittinger and Rodriguez, P.A., Dover, DE, for plaintiff.

Jeremy W. Homer, Parkowski, Noble & Guerke, Dover, DE, for defendant.

MEMORANDUM OPINION

SLEET, District Judge.

I. INTRODUCTION

Plaintiff Heather Lloynd ("Lloynd") initiated this action against her former employer, defendant Hanover Foods Corporation ("Hanover"), alleging that Hanover wrongfully refused to offer her continued health care coverage upon her discharge from Hanover on May 16, 1997. Lloynd alleges that such refusal was in violation of certain provisions of the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1161 et seq., that amended the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et. seq. She seeks to recover medical costs she incurred¹ that would have been reimbursed under Hanover's employee health plan had she not been denied her rights under COBRA, statutory penalties under 29 U.S.C. § 1132(c)(1), and attorneys' fees under 29 U.S.C. § 1132(g).

The parties agree that Hanover refused Lloynd access to continued employee health plan coverage upon her termination. They also agree that this case turns on whether or not Lloynd was terminated for "gross misconduct," in which case she would not be entitled to COBRA benefits. See 29 U.S.C. § 1163(2). Hanover asserts that Lloynd was terminated for acts amounting to conduct that was intentional, willful or, at the very least, grossly negligent. According to Hanover, such conduct justifies its denial of Lloynd's rights under COBRA. Lloynd contends that because her conduct amounted to no more than ordinary negligence, she was entitled to COBRA benefits.

A one day bench trial was held on November 2, 1999. This Memorandum Opinion sets forth the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

II. FINDINGS OF FACT

A. Background

Lloynd was employed by Hanover at its manufacturing plant in Clayton, Delaware from May 1993 until her termination on May 16, 1997. During her employment, Lloynd was covered under Hanover's employee health benefit plan ("the Plan"). The parties have stipulated that the Plan is a "group health plan" within the meaning of 29 U.S.C. § 1167(1) and that Hanover is the plan sponsor and plan administrator. The parties also agree that Hanover did not offer COBRA benefits to Lloynd upon her termination, nor was she notified of any right to COBRA benefits pursuant to 29 U.S.C. § 1166.

Hanover manufactures a variety of food products at its Clayton plant. Lloynd was employed there as an ingredients mixer. As such, her responsibilities included the mixing of ingredients for Hanover's various products. Hanover's employees were apparently assigned to different product lines from day to day.

B. The Incident Leading to Lloynd's Termination

Lloynd was terminated for an incident occurring on May 8, 1997. On that date she was assigned to mix ingredients for Hanover's ravioli product. There is no dispute that Lloynd failed to add onion powder, a required ingredient, to the eleven batches of ravioli she mixed that day. The dispute centers on whether this omission along with Lloynd's failure to report it are facts from which the inference should be drawn that her failure was intentional.

1. The Ravioli Mixing Process — As Designed

Hanover's ravioli ingredients are added in two areas — a "wet ingredients" area and a "dry ingredients" area. The ravioli ingredients are delivered in bulk to the appropriate wet or dry area prior to the start of each shift. Onion powder is to be added in the wet ingredients area.

There are three documents used in the ravioli mixing process. An "ingredient sheet" lists all of the ingredients to be used in the ravioli. A "wet batch card" and a "dry batch card" are located in the appropriate wet or dry area, and each is to list only those ingredients to be added at the respective wet or dry stage.

At the start of a shift, the ingredients mixer weighs each of the ravioli ingredients and records the weight of each on the ingredient sheet. The ingredients mixer then makes a batch of ravioli by following the "recipes" listed on the respective wet and dry batch cards. As each batch is completed, the mixer makes a notation on the ingredient sheet and then begins a new batch. At the end of the shift, the mixer is to weigh all unused ingredients and record these remaining weights on the ingredient sheet. The sheet is then turned in to a supervisor for inventory control purposes.

Hanover typically used two individuals to mix the ravioli ingredients — a wet ingredients mixer and a dry ingredients mixer. For some period of time during 1997, however, Hanover used just one ingredients mixer to perform both tasks. On May 8, 1997, Lloynd was the single ingredients mixer assigned to the ravioli line.

2. Lloynd's Version of the Events of May 8, 1997

Lloynd testified that May 8, 1997 was the first day that she had ever been responsible for mixing both the wet and dry ravioli ingredients. She had previously mixed the wet ingredients during the time that ravioli mixing was a two person job, but had done so on only a few occasions. Lloynd testified that on May 8, 1997, onion powder was not included on the wet batch card, and that the dry batch card was missing from the place that it should have been. She acknowledged that onion powder was listed on the ingredient sheet and that onion powder was present at the wet ingredients work area. Indeed, Lloynd weighed the onion powder at the start of her shift, and entered the total weight on the ingredient sheet. The May 8, 1997 ingredient sheet, signed by Lloynd, was introduced into evidence. (Def.Tr.Ex.1).²

Nevertheless, Lloynd did not add onion powder when mixing the wet ingredients, because she claims that it was not listed on the wet batch card. Nor did she add onion powder when mixing the dry ingredients. She testified that the dry batch card was missing. In lieu of the card, she claims she relied upon a nearby employee, identified only as "Eli," to tell her what ingredients should be added at the dry ingredients area.³ Because "Eli" did not mention onion powder, Lloynd did not add that ingredient. Lloynd completed eleven batches of ravioli during her shift, marking off each completed batch on the ingredient sheet. At the end of her shift Lloynd recorded the weight of the remaining unused ingredients on the ingredient sheet. She did not, however, record the weight of the unused onion powder. Instead, she left that space blank. Lloynd testified that she assumed that onion powder had been erroneously listed on the ingredient sheet. She also assumed that the powder present at the wet ingredient area had been left there in error. She testified that she understood these types of errors had occurred in the past.

Lloynd then turned in the ingredient sheet to Albarran. Nothing was said about onion powder until Albarran asked Lloynd why there was no entry on the ingredient sheet for the weight of the remaining onion powder. Lloynd told her that she had not used onion powder because it was not listed on the wet batch card. Consequently, she stated that she did not record the weight of the remaining onion powder on the ingredient sheet because she had not used any onion powder. When Albarran told Lloynd that onion powder should have been added, Lloynd became upset and asked Albarran what she should do. Lloynd testified that Albarran suggested that Lloynd should tell Pilar Sanchez, Albarran's supervisor, what had happened. According to Lloynd, Albarran said, "If it were me, I would go to Pilar and tell him about this." Lloynd did not understand this to be an "order" to report the incident. She testified that she was too overwrought to speak with Sanchez and did not do so that evening. She was so upset that when she got home she became sick and couldn't sleep. Indeed, Lloynd called in sick the next day, Friday, May 9, 1997.

3. Hanover's Version of the May 8th Incident

Hanover claims that Lloynd intentionally omitted the onion powder from the ravioli, knowing that it should have been added. Noting the difficulty of proving such intent through direct evidence, Hanover asserts that circumstantial evidence compels this conclusion. Hanover points to evidence purporting to show (1) that Lloynd's version of the events is implausible, and (2) that Lloynd had a motive to sabotage the ravioli.

As to the implausibility of Lloynd's version, Sarah Albarran testified that in her eight years with Hanover, she had never known of an ingredient sheet including ingredients that were not intended to be added to a product. She also testified that onion powder was always added in the wet ingredients area and was therefore always listed on the wet batch card. Albarran concedes, however, that she never did check the batch card in the wet ingredients area on May 8, 1997. Hanover introduced into evidence a wet batch card and a dry batch card (Def.Tr.Exs. 5 and 2, respectively), but no witness testified that these were the actual cards present in the wet and dry ingredients areas on May 8th. Further, onion powder is listed on both the wet and dry batch cards introduced into evidence. Both Albarran and Sanchez testified that onion powder should not have been listed on the dry batch card. Neither could offer any explanation whatsoever as to why it was listed on that card.

As to Lloynd's motive for sabotage, Hanover asserts that she was retaliating for being forced to work with an employee she did not like, Roylene Marvel. There is little dispute that for some time prior to May 8, 1997, Lloynd and Marvel did not get along well. Indeed, on October 27, 1995, Sanchez issued a written warning to both of them regarding a...