Underwood v. Monroe Mfg., L.L.C.

• Decision Date: 26 January 2006
• Docket Number: No. 4:03-CV-10634-RAW.,4:03-CV-10634-RAW.
• Parties: Robert K. UNDERWOOD, Jr., Plaintiff, v. MONROE MANUFACTURING, L.L.C. and Richard K. Hansen, Defendants.
• Court: U.S. District Court — Southern District of Iowa

434 F.Supp.2d 680

Robert K. UNDERWOOD, Jr., Plaintiff, v. MONROE MANUFACTURING, L.L.C. and Richard K. Hansen, Defendants.

No. 4:03-CV-10634-RAW.

United States District Court, S.D. Iowa, Central Division.

January 26, 2006.

COPYRIGHT MATERIAL OMITTED

Mark D. Sherinian, Sherinian & Walker PC, West Des Moines, IA, for Plaintiff.

Ann-Marie Holden Kendell, Danielle K. Dixon, James H. Gilliam, Brown Winick Graves Gross Baskerville Schoenebaum, Des Moines, IA, for Defendants.

RULING ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

ALTERS, United States Magistrate Judge.

This matter is before the Court on defendants' motion for summary judgment [15].This an action brought under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1140 (Count I), the Americans with Disabilities Act (ADA), 42 U.S.C. § 12100, et seq.(Count IV), the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621, et seq. (Count II), and the parallel causes of action provided by the Iowa Civil Rights Act (ICRA), Iowa Code ch. 216, et seq. (Counts III and V). The parties consented to proceed before a United States Magistrate Judge and the case was referred to the undersigned for all further proceedings on December 20, 2004. See 28 U.S.C. § 636(c). Underwood claims Monroe Manufacturing and Richard Hansen violated both federal and state law when they terminated his employment. At hearing plaintiff made an oral motion to dismiss the disability discrimination claims (Counts IV and V). That motion [35] is granted and Counts IV and V are dismissed. Defendants' motion challenges only the merits of plaintiff's age and ERISA claims.

I. SUMMARY JUDGMENT

Defendants are entitled to summary judgment if the affidavits, pleadings, and discovery materials show "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Allsup, Inc. v. Advantage 2000 Consultants, Inc., 428 F.3d 1135, 1138 (8th Cir.2005); Lund v. Hennepin County, 427 F.3d 1123, 1125 (8th Cir. 2005); Grabovac v. Allstate Ins. Co., 426 F.3d 951, 955 (8th Cir.2005); Erenberg v. Methodist Hospital, 357 F.3d 787, 791 (8th Cir.2004); Fed.R.Civ.P. 56(c); see Baucom v. Holiday Companies, 428 F.3d 764, 766 (8th Cir.2005). The Court must view the facts in the light most favorable to the nonmoving party, and give that party the benefit of all reasonable inferences which can be drawn from them, "that is, those inferences which may be drawn without resorting to speculation." Mathes v. Furniture Brands Int'l, Inc., 266 F.3d 884, 885-86 (8th Cir.2001) (citing Sprenger v. Federal Home Loan Bank of Des Moines, 253 F.3d 1106, 1110 (8th Cir.2001)); see Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Howard v. Columbia Public Schl. Dist., 363 F.3d 797, 800 (8th Cir.2004)("unreasonable inferences or sheer speculation" not accepted as fact); Erenberg, 357 F.3d at 791. An issue of material fact is genuine if it has a real basis in the record. Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir.1992) (citing Matsushita, 475 U.S. at 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). A genuine issue of fact is material if it "might affect the outcome of the suit under governing law." Hartnagel, 953 F.2d at 395 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see Hitt v. Harsco Corp., 356 F.3d 920, 923 (8th Cir.2004); Rouse v. Benson, 193 F.3d 936, 939 (8th Cir.1999); cf. Johnson v. University of Iowa, St. Bd. of Regents, 431 F.3d 325, 328 (8th Cir.2005)("Summary judgment is still appropriate ... when the disputed facts will not affect the outcome of the suit"); Baucom, 428 F.3d at 766 ("There is no genuine issue of material fact if the evidence is such that a reasonable jury could not return a verdict for [plaintiff]").

It is the non-moving party's obligation to "go beyond the pleadings and by affidavits, depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue of material fact." Rouse, 193 F.3d at 939; see Grabovac, 426 F.3d at 955 (non-moving party cannot "simply rest upon the pleadings," quoting Jeseritz v. Potter, 282 F.3d 542, 545 (8th Cir.2002)); Baucom, 428 F.3d at 766 (plaintiff may not relay on "mere allegations"); Hitt, 356 F.3d at 923. "We consider only admissible evidence and disregard portions of various affidavits and depositions that were made without personal knowledge, consist of hearsay, or purport to state legal conclusions as fact." Howard, 363 F.3d at 801. In assessing a motion for summary judgment a court must determine whether a fairminded trier of fact could reasonably find for the nonmoving party based on the evidence presented. Anderson, 477 U.S. at 248, 106 S.Ct. 2505; Herring v. Canada Life Assurance Co., 207 F.3d 1026, 1030 (8th Cir. 2000).

II. FACTUAL BACKGROUND

Defendant Monroe Manufacturing, L.L.C. (hereinafter "Monroe") is an Iowa limited liability company with its principal place of business in Colfax, Iowa. Monroe manufactures tables for the rental/convention industry, and for churches and schools. The plant had two production areas: one was the "metal" area and the other the "wood" area.

Plaintiff Robert Underwood began his employment with the company in August 1963 in the metal area. (Def.App. at 3). He initially started on the floor working with the riveting machine and drilling holes. In approximately 1964, Underwood became a welder in the metal area and in 1970 began supervising the metal department. (Id. at 4-7). Bill Coville, the plant manager and a former owner, was Underwood's immediate supervisor at all times relevant to this lawsuit. (Id. at 8, 12-13, 49-50).

In July 2000 Monroe's sales began to drop. (Def.App. at 59-61). In February 2001 the company initiated a round of layoffs, laying off everyone in the company except for the sales force and two production supervisors, Underwood and Steve West (who was in charge of the wood side of the plant), in an attempt to rebuild the company's order list. (Id.) Approximately three months later the company began recalling employees on a limited basis, based on the business needs of the company and the seniority of the employees. (Id.) In the summer of 2001 the company had a second round of layoffs, as the company's sales had again fallen off. (Id.) At this point, the company reduced the wages of all salaried employees. (Id. at 62, 75). Following 9/11, sales declined further.¹ (Id. at 50, 59-61, 28, 32-33).

Defendant Richard Hansen and an individual named David DeWaard purchased the company from its secured creditors in October 2002 and owned it until approximately February 2004. (Def.App. at 11, 27, 49). Hansen owned 90 percent of the company; Dewaard 10 percent. (Id. at 27). When they purchased the company, Monroe had lost its group health insurance benefits. (Id. at 34-35, 56). In an October 2002 conversation with Carol Swift, a sales manager at the company, Hansen explained the increased cost of the new group health insurance benefits he had been able to secure. Hansen had been told by the insurance companies that Monroe's workforce had "bad demographics" which Hansen explained more simply to Swift as meaning Monroe had "some" or "a lot" (the record varies) of "old, sick people." (Id. at 38, 74).

Hansen made other statements which Underwood contends show animosity on Hansen's part to older workers. Though the statements allegedly made by Mr. Hansen and the context are disputed, the Court takes Underwood's version as true for the purposes of summary judgment. At a meeting to explain the company's new health insurance Hansen asked Underwood why he was not on his wife's insurance policy. (Pl.App.91). A couple of years earlier Underwood had told Coville he was thinking of retiring at age 62. After Hansen arrived he asked Underwood if that was true. Underwood responded "no" because he had since been advised by Coville that the company's pension plan had not been funded for three years. (Id. at 87-88). By affidavit, former Monroe employee Clarence Bair has said that at some point while he and Hansen were walking through the plant together, Hansen looked around at the workers and "made an offhand comment to the effect that he would rather have younger people working there than older people ... younger people could do more, better and quicker and .. . old people can't keep up." (Id. at 1).

Hansen spent two or three days a week at the plant, occasionally walking through the factory area. (Def.App. at 12, 37). Coville oversaw the day-to-day operations of the factory; Hansen controlled disbursements of funds. (Pl.App. at 12). Coville described Hansen's management style as "abrupt" and "opinionated," though he said Hansen did not force him to make decisions he did not want to make. (Id. at 13). From the beginning of Hansen's tenure Monroe was in a "turn-around situation" in which costs had to be cut. (Id. at 12-13). One area on which Hansen and Coville disagreed and had heated discussions was the size of the workforce. (Id. at 13). According to Coville, Hansen "felt he had too large of a labor force and there was always pressure to trim back on that." (Id. at 14). Nonetheless, Hansen had agreed that for a period of time after he acquired the company Coville would be allowed to retain the existing workforce until it was apparent in what direction the company was heading. (Id. at 16).

In February 2003 Monroe attended the annual National Rental Association show in Anaheim, California, posting the worst sales in the company's history. Typically the company's sales reached $900,000 at this show, but in February 2003 its sales were only $75,000. (Def.App. at 32-33).² Monroe's rental business approximated 30 to 40 percent of its business and after the February 2003 show, sales continued to decline.³ (Id. at 32-33, 57-58).

Concluding the company needed to further reduce or...