Szot v. Allstate Ins. Co.

• Decision Date: 24 August 2001
• Docket Number: Civil Action No. AW-99-3855.
• Citation: 161 F.Supp.2d 596
• Parties: Emme SZOT, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Maryland

161 F.Supp.2d 596

Emme SZOT, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.

Civil Action No. AW-99-3855.

United States District Court, D. Maryland, Southern Division.

August 24, 2001.

Joseph JD Erasmo, Rockville, MD, for plaintiff.

Janet M. Truhe, Miller & Truhe, L.L.C., Westminster, MD, for defendants.

MEMORANDUM OPINION

WILLIAMS, District Judge.

Plaintiff, Emme Szot, brings this diversity action against her former employer, Allstate Insurance Company ("Allstate"). Based upon the events surrounding her discharge, Ms. Szot asserts claims of breach of her employment contract (Count I) and defamation (Count II). Currently pending before the Court is Defendant's Motion for Summary Judgment [15-1]. The motion has been fully briefed by all parties. No hearing is deemed necessary. See Local Rule 105.6. Upon consideration of the arguments made in support of, and opposition to, the motion, the Court makes the following determinations.

I. FACTUAL BACKGROUND

On November 17, 1986, Ms. Szot entered into an employment agreement with Allstate. The "R1500" Agent Employment Agreement (the "Agreement") set forth the terms and conditions of Plaintiff's employment as an agent of Allstate, including provisions relating to discipline, suspension, and termination. With respect to termination, Section 11 of the Agreement states, in pertinent part, "your employment and this Agreement may be terminated at will by either party, subject only to such limitations and restrictions as may be imposed by law, and in accordance with Company rules and procedures." (Def.Mot.Summ.J.Ex. B at 3.)

Ms. Szot worked under this agreement for twelve years. During her tenure, Ms. Szot sold a variety of Allstate insurance products, including property and casualty insurance. Her employment record reflected a high volume of sales and that Ms. Szot was regarded as an outstanding and highly productive senior account agent.

During her employment, Ms. Szot had a number of disagreements with Margaret Hixon, the Territorial Risk Manager for Maryland and head of Allstate's Underwriting Department, regarding issues of coverage and the application of Allstate's Discount Rules. The center of the controversy surrounded the crediting of protective and renovated home discounts. A protective device discount ("PDD") "is allowed for the installation of burglary and/or fire alarm systems in the residence" in accordance with a specified schedule that included a "smoke detector on every floor, fire extinguisher, [and] dead bolt locks on all exterior doors." (Def.Mot.Summ.J.Ex L. at 16). A "renovated home" discount is available if a "roof, plumbing, electrical, and heating/cooling system" has been installed "by a licensed contractor within the last 9 years." (Id. at 13.) Ms. Szot understood Allstate's procedures with respect to giving "protective device" or "renovated home" discounts as permitting a discount if, based upon the customer's representations to the agent, the prerequisites were satisfied at the time of application or within thirty days of the application. Ms. Hixon and Allstate interpreted its procedures to require that, based upon the customer's representations to the agent, the prerequisites must be satisfied at the time of application alone.

Because of the disagreements, Ms. Hixon referred four polices written by Ms. Szot to Human Resources as required for reporting perceived inconsistencies. Human Resources transferred the polices to Francisco "Frank" Miguel Llende, Territorial Corporate Security Manager for Allstate, to investigate whether Ms. Szot committed an integrity violation or infraction. In addition, Mr. Llende received Ms. Szot's employment agreement, Allstate's code of ethics, and its guidelines for allowing discounts. According to his report Mr. Llende interviewed Ms. Szot and the customers of the transferred policies. (Def.Mot.Summ.J.Ex. K at 1.) Each of the customers interviewed provided information indicting that he or she did not qualify for the discounts at the time of application. The customers stated that, at the time of application, either Ms. Szot did not ask about the presence of certain requirements or they informed her that the requirements were not presently in place. During her interview, Ms. Szot explained her interpretation as to when protective device and renovated home discounts were permissible. However, with respect to three of the four policies at issue, she stated that the customers represented to her the requirements for the discounts were satisfied at the time of application. With respect to one customer, Matthew Parker, Ms. Szot acknowledged that he represented to her that the requirements were not in place at the time of application, but would be satisfied within thirty days. Based upon this information, Ms. Szot gave Mr. Parker the discounts. After completing his investigation, Llende drafted a report stating that there was sufficient evidence to support terminating Ms. Szot for dishonesty and falsification of company documents. The report concluded that "the irrefutable evidence proved Szot falsified customer Parker's Allstate Homeowners insurance application" and "the weight of the evidence indicates Szot also falsified [three other customers'] Allstate Homeowner insurance applications." (Def.Mot.Summ.J.Ex K at 6.) Llende submitted his report and it was distributed to five managers.

Based upon the contents of the report, Ms. Szot was recommended for termination. As the reason for termination, the recommendation stated "[d]ishonesty and violation of company policy relative to falsification of company documents as outlined in the HR Policy Manual, Chapter 17, Section 4.2, the Sales Code of Ethics and Statement of Policy and the R1500 Agent Employment Agreement." (Pl. Opp'n Ex. 2). On December 16, 1998, Sean Wilson, the Human Resources Division Manager, and Tim Semones, Ms. Szot's supervisor, requested a meeting with Ms. Szot in Mr. Semones' office. At the meeting, Mr. Semones informed Ms. Szot that she was being terminated for dishonesty and falsification of corporate documents. Ms. Szot inquired as to the particular documents involved. Mr. Wilson identified application information as the source and stated that he was not at liberty to discuss the details of the corporate security investigation or the decision making process. After Ms. Szot continued to request more details, Mr. Wilson stated that the decision to terminate her was based upon the four applications investigated by corporate security.

II. DISCUSSION

A. Standard of Review

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment will be granted when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Haavistola v. Community Fire Co. of Rising Sun, Inc., 6 F.3d 211, 214 (4th Cir.1993); Etefia v. East Baltimore Comm. Corp., 2 F.Supp.2d 751, 756 (D.Md.1998). "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 1). The court must "draw all justifiable inferences in favor of the nonmoving party, including questions of credibility and of the weight to be accorded particular evidence." Masson v. New Yorker Magazine, 501 U.S. 496, 520, 111 S.Ct. 2419, 115 L.Ed.2d 447 (1991) (citations omitted). While the evidence of the non-movant is to be believed and all justifiable inferences drawn in his or her favor, a party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences. See Deans v. CSX Transportation, Inc., 152 F.3d 326, 330-31 (4th Cir.1998); Beale v. Hardy, 769 F.2d 213, 214 (4th Cir.1985). "Unsupported speculation is not sufficient to defeat a summary judgment motion." Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987). In responding to a proper motion for summary judgment, the party opposing summary judgment must present evidence of specific facts from which the finder of fact could reasonably find for him or her. Anderson, 477 U.S. at 252, 106 S.Ct. 2505; Celotex Corp., 477 U.S. at 322-23, 106 S.Ct. 2548. In the absence of contradictory evidence showing a genuine dispute as to a material fact, the moving party is entitled to judgment as a matter of law. Celotex Corp., 477 U.S. at 317, 106 S.Ct. 2548. For the purposes of summary judgment, a genuine dispute exists if a reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Plaintiff asserts two claims under Maryland law, breach of her employment contract and defamation. As a case brought before the federal court under its diversity jurisdiction, the substantive laws of the forum state, Maryland, apply to the advanced state claims. See, e.g., Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

B. Count I (Breach of Contract)

Ms. Szot alleges that Allstate breached her employment contract in terminating her. "It is a longstanding principle in Maryland that an indefinite hiring is prima facie a hiring at-will." Lubore v. RPM Associates, Inc., 109 Md.App. 312, 326, 674 A.2d 547, 554 (1996). "Where, therefore, the employment contract is of an indefinite duration, the contract is one for at-will employment and ... either party at any time may legally terminate it." Id. "As the designation implies, an employer may ordinarily terminate an at-will employee at any time, for almost any reason or for no reason." Samuels v. Tschechtelin, 135 Md.App. 483, 525, 763 A.2d 209, 232 (2000). However, "at-will employment is subject to modification `by the provisions of an employee handbook or the...