Lyons v. Midwest Glazing, L.L.C.
| Decision Date | 18 December 2002 |
| Docket Number | No. C01-3071-MWB.,C01-3071-MWB. |
| Citation | 235 F.Supp.2d 1030 |
| Parties | Roger R. LYONS and Gretchen A. Eddy, Plaintiffs, v. MIDWEST GLAZING, L.L.C., d/b/a Eddy's Glass & Door, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Randall E. Nielsen, Pappajohn, Shriver, Eide, Nicholas, Mason City, IA, for Plaintiffs.
Mark L. Zaiger, Patricia L Hoffman-Simanek, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Defendant.
TABLE OF CONTENTS
I. INTRODUCTION ............................................. 1033
A. Procedural Background .................................. 1033
B. Factual Background ..................................... 1034
II. LEGAL ANALYSIS ............................................ 1039
A. Standards For Summary Judgment ......................... 1039
1. Requirements of Rule 56 ............................ 1039
2. The parties' burdens ............................... 1040
B. Abuse Of Process Claim ................................. 1040
1. Legal Process Requirement .......................... 1040
2. Improper Purpose Requirement ....................... 1042
C. Defamation Claims ...................................... 1043
1. Slander Claim ...................................... 1044
2. Qualified Privilege Immunity To Libel Claim ........ 1046
a. Good faith ..................................... 1046
b. Interest to be upheld .......................... 1047
c. Scope of statements ............................ 1047
d. Proper occasion, manner and party .............. 1047
D. FMLA Claim ........................................... 1047
E. Contract Damages ..................................... 1047
1. Emotional distress damages under contract claim .. 1048
2. Damages beyond the date of Lyons' new employment . 1050
F. Punitive Damages ..................................... 1051
III. CONCLUSION ............................................... 1051
On July 23, 2001, plaintiffs Roger R. Lyons and Gretchen A. Eddy filed this lawsuit in the Iowa District Court In And For Winnebago County against Midwest Glazing, L.L.C. ("Midwest Glazing"), d/b/a Eddy's Glass & Door ("Eddy's Glass"). Midwest Glazing removed this case to this court on August 21, 2001, pursuant to 28 U.S.C. § 1441. In their petition, plaintiffs assert claims for breach of contract, abuse of process, defamation, violation of the Family Medical Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq., violation of the Fair Labor Standards Act ("FSLA"), 29 U.S.C. § 201, and punitive damages against Midwest Glazing.1 Specifically, plaintiff Lyons asserts that Midwest Glazing has breached a sales contract that it would not to terminate Lyons's employment without good cause. On March 28, 2002, Midwest Glazing filed an amended and substituted answer in which it asserted counterclaims against Lyons for tortious interference and breach of fiduciary duty.
On November 4, 2002, Midwest Glazing filed a motion for partial summary judgment. In its motion, Midwest Glazing moves for summary judgment on plaintiff Lyons's claims for abuse of process, defamation and violation of the FMLA. Defendant Midwest Glazing also seeks partial summary judgment relating to damages recoverable for breach of contract and punitive damages. On November 27, 2002, plaintiff Lyons filed a resistance to Midwest Glazing's motion for partial summary judgment.
Pursuant to Midwest Glazing's request, the court held telephonic oral arguments on Midwest Glazing's motion for partial summary judgment on December 6, 2002. At the oral arguments, plaintiff Lyons was represented by Randall E. Nielsen of Pappajohn, Shriver, Eide & Nicholas, P.C., Mason City, Iowa. Defendant Midwest Glazing was represented by Mark L. Zaiger of Shuttleworth & Ingersoll, P.L.C. The court turns first to a discussion of the undisputed facts as shown by the record, then to the standards applicable to motions for summary judgment and, finally, to the legal analysis of whether Midwest Glazing is entitled to summary judgment on any of the claims at issue in this litigation.
The following facts are undisputed. Eddy's Glass & Door was formed by Douglas Eddy as a glazing and overhead door company. In 1976, Douglas Eddy married Gretchen Lyons. Gretchen Lyons changed her name to Gretchen Eddy. Plaintiff Roger Lyons is the son of Gretchen Eddy from a previous marriage. Lyons worked at Eddy's Glass for his stepfather when he was in high school and began working full time for Eddy's Glass in 1987. Douglas Eddy died on October 31, 1996. Douglas Eddy's will provided that the business be sold and the proceeds of the sale made part of his estate. The business was not willed to Roger Lyons. Gretchen Eddy was the sole beneficiary of Douglas Eddy's estate.
Gretchen Eddy, through her counsel, attempted to find buyers for the business. Midwest Glazing in time bought Eddy's Glass. A sales agreement was executed on December 29, 1997, by Gretchen Eddy for the estate of Douglas Eddy, Midwest Glazing and Iowa Glass Depot, Inc. ("Iowa Glass"). Iowa Glass purchased the real estate and Midwest Glazing purchased the business assets. Midwest Glazing operated the business after the transaction.
Gretchen Eddy wanted the sale of the business to Midwest Glazing to provide her son with job security. She intended that her son would benefit from the sale of Douglas Eddy's business. As a result, paragraph seven of the Sales Agreement provided:
7. Buyer agrees to offer employment to all employees currently employed by Eddy's Glass and Door as of said date of closing for a period of not less than six months from said date and further agrees to maintain the employment of key employees, namely: Kermith Balvance and Roger Lyons subject only to termination for cause on the part of said employees or voluntary resignation or termination at the option of said employees.
Roger Lyons was first offered the position of manager at Eddy's Glass by Midwest Glazing but declined the offer. After Lyons turned down the position, Kermith Balvance took the position as manager at Eddy's Glass. In December 1998, Randy Taylor replaced Balvance as manager. He remained as manager until March, 2000. Balvance resumed being the manager of Eddy's Glass when Taylor was fired. Balvance continues to work for Eddy's Glass. On December 18, 2000, Balvance voluntarily stepped down as manager and was replaced by Julie Weide.
For the first four months after Midwest Glazing purchased Eddy's Glass, Lyons was an hourly employee. On May 1, 1998 Midwest Glazing placed Lyons solely in charge of managing the overhead door side of the business at Eddy's Glass and he became a salaried employee. Lyons declared himself to be the Product Manager and purchased a stamp that indicated such. Lyons's increased responsibilities included scheduling, estimating bids, ordering parts, supervising crews, and installing doors when needed.
As part of company policy, Midwest Glazing instituted a paid time-off program that replaced separate vacation and sick leave policies. Eddy's Glass employees received a certain number of paid hours each year. Under the program, Lyons received 160 hours per year in paid time-off to use for vacation, sick leave, or personal reasons. In 1999, Randy Taylor, as manager of Eddy's Glass, kept track of Lyons's use of paid time-off. Based on the 1999 information spreadsheet, Midwest Glazing believed that Lyons had abused the paid time-off policy in 1999. As a result, Midwest Glazing continued to track Lyons's use of the paid time-off policy in 2000. Midwest Glazing asserts that Lyons abuse of the paid time-off policy is one of the reasons why it ultimately discharged him. Lyons asserts that on several of the days that he took off, he came back to the office and worked late making up the hours. After being presented with the 2000 spreadsheet indicating that his paid time-off hours were all used up, Lyons took seven days off work for vacation. Lyons's employment was terminated on January 2, 2001. When Lyons was fired, Midwest Glazing told him that it was because he was a "poison pill" who brought down company morale and because he had abused the company's paid time-off policy in 2000. On January 30, 2001, Lyons obtained employment with Advance Door Systems in Forest City, Iowa. Advance Door Systems sells and installs garage doors. It is owned by Holland Contracting. Holland Contracting hired Lyons as the manager of Advance Door Systems. Lyons has made more money with Advance Door Systems as a salaried employee than as a salaried employee with Eddy's Glass. Lyons's duties and responsibilities at Advance Door Systems are similar to what his duties and responsibilities were at Eddy's Glass. Lyons was frustrated while at Eddy's Glass because the company decisions were made by the Cedar Rapids office instead of the Forest City office. He does not have such frustrations at Advance Door Systems.
After Lyons's termination, employees of Eddy's Glass determined that some samples, parts, and other items were missing from the company. Doug Cronkwright, an employee of Eddy's Glass, indicated that Lyons had materials at his house and his mother's house. Joe Driscoll, Midwest Glazing's operations manager, was notified by Eddy's Glass's manager, Julie Weide, about these allegations. Driscoll consulted with an employee at Iowa Glass, Orlie Workman, a former Linn County Sheriff, who assists with security for Iowa Glass. Workman recommended that Driscoll contact the county sheriff to ascertain the proper method for determining whether Lyons had taken...
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