Schmitt v. Beverly Health and Rehabilitation Serv.

• Decision Date: 22 January 1998
• Docket Number: Civil Action No. 96-2537-EEO.
• Citation: 993 F.Supp. 1354
• Parties: Dawn M. SCHMITT, Plaintiff, v. BEVERLY HEALTH AND REHABILITATION SERVICES, INC., Defendant.
• Court: U.S. District Court — District of Kansas

993 F.Supp. 1354

Dawn M. SCHMITT, Plaintiff, v. BEVERLY HEALTH AND REHABILITATION SERVICES, INC., Defendant.

Civil Action No. 96-2537-EEO.

United States District Court, D. Kansas.

January 22, 1998.

Memorandum Denying Motion to Alter or Amend March 31, 1998.

COPYRIGHT MATERIAL OMITTED

David O. Alegria, McCullough, Wareheim & LaBunker P.A., Topeka, KS, for Plaintiff.

Renana B. Abrams, Jennifer P Kyner, Stacey A. Campbell, Armstrong, Teasdale, Schlafly & Davis, Kansas City, MO, Paul Venker, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

EARL E. O'CONNOR, District Judge.

This matter is before the court on defendant's motion for summary judgment (Doc. # 91). After careful consideration of the parties' briefs and evidentiary materials, the court is prepared to rule. For the reasons stated below, defendant's motion will be granted.

Factual Background

For purposes of defendant's motion, the following is a brief summary of the material facts that are uncontroverted, deemed admitted, or where controverted viewed in the light most favorable to the non-movant, pursuant to Federal Rule of Civil Procedure 56 and District of Kansas Rule 56.1.

On June 8, 1994, plaintiff started working for Colonial Manor Nursing Care Center ("Colonial Manor") in Lansing, Kansas, as a Certified Nursing Assistant. Beverly Enterprises — Kansas, Inc. ("Beverly Enterprises") owns Colonial Manor. Plaintiff was an employee of Beverly Enterprises. Defendant Beverly Health and Rehabilitation Services, Inc. ("Beverly Health") is a separate corporate entity from the incorporated entity known as "Beverly Enterprises — Kansas, Inc." Plaintiff's written job description, which was signed by plaintiff, lists "Beverly Enterprises" at the top of the document. The Associate Relations Policies & Procedures Manual also identifies "Beverly Enterprises" at the top of the document. Jackie Heikes Rose, who was employed by Beverly Enterprises, was Director of Nursing at Colonial Manor and was plaintiff's supervisor. Garold Fowler, who also was employed by Beverly Enterprises, was the Administrator at Colonial Manor.

Donald Clark is employed by Beverly Health. Mr. Clark is the Human Resources manager for Beverly Enterprises in the region including the Colonial Manor facility. Mr. Clark was a consultant on personnel issues. Mr. Clark advised Mr. Fowler and the staff supervisors, including Ms. Rose, of the consequences of various alternatives, but Mr. Fowler and the staff supervisors actually made the personnel decisions and retained the ultimate authority on personnel issues at Colonial Manor.

On January 27, 1995, plaintiff was told that she was no longer employed at Colonial Manor because of two no-call, no-shows on January 21 and 22, 1995. Plaintiff claims that Ms. Rose and Mr. Fowler terminated her. Mr. Fowler signed and approved plaintiff's termination of employment form. After plaintiff was terminated, Ms. Rose and Mr. Fowler notified Mr. Clark that plaintiff's employment had ended because she did not work on January 21 or 22, 1995.

On April 11, 1995, plaintiff filed a charge of discrimination with the Kansas Human Rights Commission ("KHRC") and the Equal Employment Opportunity Commission against "Colonial Manor Beverly Enterprises" alleging that she was on a list to be fired, written up, and terminated because of her sex and pregnancy.

Plaintiff filed the instant action against "Beverly Health And Rehabilitation Services, Inc., a/k/a Beverly California Corporation, a/k/a Beverly Enterprises, d/b/a Colonial Manor Nursing Care Center, and any and all predecessors, successors and assigns." The record reflects no return of service, appearance, or further action against any defendant except "Beverly Health and Rehabilitation Services, Inc."

Summary Judgment Standards

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is 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.

The moving party bears the initial burden of showing that there is an absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Hicks v. City of Watonga, 942 F.2d 737, 743 (10th Cir.1991). Essentially, the inquiry as to whether an issue is genuine 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. An issue of fact is genuine if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. at 248. This inquiry necessarily implicates the substantive evidentiary standard of proof that would apply at trial. Id. at 252.

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 Sec., 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 nonmoving party may not rest on his pleadings but must set forth specific facts. Applied Genetics, 912 F.2d at 1241.

"[W]e must view the record in the light most favorable to the parties opposing the motion for summary judgment." Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir.1991). "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, 793 (10th Cir. 1988). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Anderson, 477 U.S. at 256. Where the nonmoving party fails to properly respond to the motion for summary judgment, the facts as set forth by the moving party are deemed admitted for purposes of the summary judgment motion. D. Kan. Rule 56.1.

Analysis

I. Plaintiff's Pregnancy Discrimination Claim.

In count II of her complaint, plaintiff claims that defendant discriminated against her based on her pregnancy in violation of Title VII. Defendant claims that plaintiff cannot establish that Beverly Health was plaintiff's employer. Although Beverly Health apparently is the parent corporation of Beverly Enterprises, Beverly Health is a separate corporate entity from Beverly Enterprises. "The doctrine of limited liability creates a strong presumption that a parent company is not the employer of its subsidiary's employees, and the courts have found otherwise only in extraordinary circumstances." Frank v. U.S. West, Inc., 3 F.3d 1357, 1362 (10th Cir.1993) (citing Johnson v. Flowers Indus., Inc., 814 F.2d 978, 980-81 (4th Cir.1987)).

Federal courts have employed several tests to determine whether Title VII liability can be imposed on a parent corporation for the actions of its subsidiaries. These tests include: (1) whether the two companies are integrated, (2) whether the parent exercises a significant degree of control over the subsidiary's decisions, (3) whether the parent is the alter ego of the subsidiary, and (4) whether the parent exercises extensive control over the acts of the subsidiary with respect to the particular claim of wrongdoing. See Frank, 3 F.3d at 1362. Although the Tenth Circuit has declined to adopt a single test, the critical inquiry under each test is whether the parent exercised control over significant aspects of the plaintiff's terms and conditions of employment or the parent dominated the subsidiary's operations to such a degree that the two companies are in reality a single entity. See Johnson, 814 F.2d at 981; Magnuson v. Peak Tech. Servs., Inc., 808 F.Supp. 500, 507-08 (E.D.Va.1992); see also Frank, 3 F.3d at 1363 (critical question under the integrated enterprise test is "[w]hat entity made the final decisions regarding employment matters related to the person claiming discrimination?") (quoting Trevino v. Celanese Corp., 701 F.2d 397, 404 (5th Cir.1983)). The presumption of limited liability, however, remains the rule. See Johnson, 814 F.2d at 981. "Only evidence of control suggesting a significant departure from the ordinary relationship between a parent and its subsidiary—domination similar to that which justifies piercing the corporate veil — is sufficient to rebut this presumption, [], and to permit an inference that the parent corporation was a final decision-maker in its subsidiary's employment decisions." Lusk v. Foxmeyer Health Corp., 129 F.3d 773, 778 (5th Cir.1997).

Plaintiff has not made any attempt, either in opposition to defendant's motion for summary judgment or in her complaint, to allege facts sufficient to support any one of the above legal theories for imposing liability on the parent corporation, Beverly Health. Indeed, plaintiff has not even come forward with any evidence suggesting that Beverly Health is the parent corporation of Beverly Enterprises. The only evidence which suggests an interrelationship between Beverly Health and Beverly Enterprises is that Donald Clark, an employee of Beverly Health, was the Human Resources manager of Beverly Enterprises. Mr. Fowler and one of the various staff supervisors (here, Ms. Rose), however, retained the...