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Beesen-Dwars v. Duane Morris LLP

July 24, 2007

GAIL BEESEN-DWARS, PLAINTIFF,
v.
DUANE MORRIS LLP, DAVID YELIN, AND JANE L. DALTON, DEFENDANTS.



The opinion of the court was delivered by: Hon. Joan H. Lefkow

MEMORANDUM OPINION AND ORDER

Plaintiff, Gail Beesen-Dwars ("plaintiff"), filed a twelve count complaint against defendants Duane Morris LLP ("the Firm"), David Yelin ("Yelin"), and Jane Dalton ("Dalton") (collectively, "defendants"), alleging counts of sex and age discrimination and retaliation against the Firm; one count of intentional interference with contractual relations against Yelin and Dalton; and counts against defendants of harassment, breach of fiduciary duty, intentional interference with prospective economic advantage, breach of a joint defense agreement, breach of a partnership agreement, fraudulent concealment and other fraudulent conduct, intentional infliction of emotional distress, and negligence. Before the court is defendants' motion to dismiss counts V-XII for want of personal jurisdiction and for failure to state a claim under Illinois law and defendants' motion to dismiss counts I-IV for failure to state a timely federal discrimination claim. For the reasons set forth below, defendants' motion is denied in part and granted in part.

I. MOTION TO DISMISS STANDARD

A motion to dismiss under 12(b)(6), Fed. R. Civ. P., challenges the legal sufficiency of the complaint for failure to state a claim upon which relief may be granted. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ibid.; Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994), a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2 d 209 (1986) (on a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation"). Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) (hereinafter Wright & Miller) ("[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action"), [FN3] on the assumption that all the allegations in the complaint are true (even if doubtful in fact), see, e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506, 508, n. 1, 122 S.Ct. 992, 152 L.Ed. 2d 1 (2002); Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 104 L.Ed. 2d 338 (1989) ("Rule 12(b)(6) does not countenance ... dismissals based on a judge's disbelief of a complaint's factual allegations"); Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed. 2d 90 (1974) (a well-pleaded complaint may proceed even if it appears "that a recovery is very remote and unlikely").

II. ALLEGATIONS OF THE COMPLAINT

A. Background

In February 2000, plaintiff, an experienced commercial real estate attorney, was hired by the law firm Duane Morris as "Special Counsel" with the promise that she would be considered for partnership shortly after the commencement of her employment. To their word, the Firm offered plaintiff a position as a "Contract Partner" on March 31, 2000, which she accepted. Plaintiff executed a partnership agreement, and thereafter her compensation was determined by the Partners Board and she was treated as a partner for federal, state, and local tax purposes. In June 2000, the Firm substantially increased plaintiff's compensation, and then again on March 16, 2001, at which time it promised to consider elevating her to a position as an "Income" or "Equity" partner.

In November 2001, a fellow male partner took a leave of absence to receive treatment for a substance abuse problem. The Chicago Office Executive Committee of the Firm, which consisted of Yelin and two other partners, asked plaintiff to handle the absent partner's responsibilities. Plaintiff agreed, and expended extensive time and effort, much of which was non-billable, addressing problems caused by her fellow partner's absence. Plaintiff was not rewarded for her efforts, but instead suffered a $63,500 pay cut because, according to Yelin, her billable hours had declined. The absent male partner's pay was not cut.

B. Perkins's Complaint and Dalton's Flawed Investigation

On October 10, 2002, plaintiff's secretary, Andrea Perkins ("Perkins), emailed the Firm's Human Resources Director to report that plaintiff had made an inappropriate racial remark. In response to Perkins's email, Dalton, a partner in the Firm's Philadelphia office, undertook an investigation. Dalton failed, however, to properly investigate Perkins's complaint by failing to interview key witnesses; failing to conduct in-person interviews with other key witnesses; conducting only a brief and perfunctory interview with plaintiff; discussing her investigation with other Firm partners; and permitting her findings to circulate through the office in violation of the Firm's policy and its representation that the results of Dalton's investigation would remain confidential. In addition to failing to properly investigate Perkins's complaint, Dalton used Perkins's complaint as a pretext for opening a larger inquiry into plaintiff's interactions with other members of the Firm's staff in an effort to find a basis to terminate plaintiff's employment.

Attempting to defend herself against Perkins's complaint and the other allegations made against her in the course of Dalton's investigation, plaintiff requested a copy of Perkins's complaint and a copy of Dalton's investigation report. The Firm, however, refused.

Ultimately, two members of the Firm's Executive Committee, including Yelin, advised plaintiff that though Dalton's investigation had uncovered no evidence that she had made an improper racial remark, it did reveal that she had mistreated Perkins and other staff. Yelin further advised plaintiff that the Firm had notified Perkins by letter that the Firm had found no evidence that plaintiff had made an improper racial remark. Plaintiff then inquired as to whether the letter made any other representations, to which Yelin replied that the letter did not say "much else." That statement, however, was false, because the letter, which Yelin had approved, contained disparaging remarks about plaintiff.

On April 1, 2003, the Chicago Daily Law Bulletin published a front-page article discussing Perkins's allegations against plaintiff. The article reported that "Ms. Beesen-Dwars had engaged in unprofessional conduct," and that "the firm has taken remedial action to assure that such unprofessional conduct will not be repeated." The publication of the article caused plaintiff tremendous physical and emotional stress. A similar article was published in The Defender on November 8, 2003.

C. Perkins's Suit Against the Firm and Plaintiff

Soon after the publication of the Chicago Daily Law Bulletin article, in July 2003, Perkins filed suit against the Firm and plaintiff. Plaintiff entered into a joint defense agreement with the Firm, but despite that cooperation, the Firm still refused to provide her with information regarding Dalton's investigation. On January 21, 2004, plaintiff was permitted to briefly look through documents, including Dalton's investigation report, that were scheduled to be produced to Perkins pursuant to a discovery request. During that inspection, plaintiff discovered that Dalton had seriously misquoted her during their interview. Plaintiff was unable, however, to decipher many of the notes, and therefore requested a typewritten copy from the Firm. The Firm again refused to provide plaintiff with a copy.

D. Defendants' Subsequent Harassment, Discrimination and Retaliation

In September 2003, plaintiff was scheduled to close "one of the most visible and complex affordable housing transactions ever carried out in Illinois." On the eve of the closing, Yelin withdrew plaintiff's paralegal support, claiming that it was needed by other members of the Firm. Plaintiff remained without paralegal support throughout 2004, which forced her to devote a substantial number of hours performing non-billable paralegal work. On another occasion, Yelin fired plaintiff's assistant during a crucial time when plaintiff was rushing to meet a client deadline. Additionally, when Yelin informed plaintiff that he had fired her assistant, he leaned over her in a threatening manner. Yelin also harrassed her by repeatedly reproaching her about using vacant back office space to prepare for closings and disrupting her work for clients at critical times with persistent demands about non-urgent administrative matters.

Later, in February 2004, Yelin closed one of plaintiff's client's accounts before critical work on the client's account had been completed. As a result, plaintiff was again required to devote a substantial number of hours to non-billable work, this time to clear administrative hurdles to re-open her client's account. Worse, these extra duties prevented plaintiff from timely completing critical work on the client's account. The client became so enraged at how he had been treated by the Firm that he gave his next transaction to a competing firm, despite the fact that he had previously promised it to plaintiff.

In mid-May 2004, plaintiff received an email stating that she needed to meet with the Chicago Office Management Committe on May 24, 2004. At the meeting, which in the interim had been postponed to May 26, 2004, Yelin was hostile, accusatory and verbally abusive, telling plaintiff that she was "non-communicative" and that he could not trust her to work with clients.

On June 3, 2004, plaintiff was in the kitchen of the office suite. Yelin entered and walked quickly towards plaintiff, glaring at her with a menacing expression. Plaintif feared that the much taller Yelin would "crash into her or shove her aside." Plaintiff had to "jump back quickly to avoid being knocked over."

A meeting of the Partners Board was set for June 4, 2004. Prior to the meeting, plaintiff had received various emails suggesting that the Partners Board intended to consider at that meeting whether to terminate her employment. In the weeks following the meeting, plaintiff learned nothing regarding the outcome of the meeting. Finally, on June 22, 2004, plaintiff asked Michael Silverman ("Silverman"), General Counsel of the Firm, whether Yelin had encouraged the Partners Board to terminate her employment. Silverman denied that Yelin had approached the Partners Board about her and insisted that she had not been terminated.

On August 2, 2004, plaintiff again approached Silverman. This time, plaintiff complained about Yelin's conduct, which she contended had damaged her practice. Plaintiff approached Sliverman with the intent of reaching an amicable solution to her issues with Yelin and the Firm. Instead of addressing her concerns, though, Silverman pressured plaintiff to quickly resolve Perkins's suit and advised her that her issues with the Firm and Yelin would "take time to resolve."

Having received no response from the Firm regarding her informal complaints, plaintiff filed a formal written complaint on September 9, 2004 alleging that she had been subjected to unlawful harassment and discrimination. Approximately 16 hours later, the Firm sent her a letter requesting her withdrawal from the Firm by December 31, 2004. Then, despite her request in her complaint that any investigation into her allegations be conducted by a mutually acceptable independent third party, the Firm instead initiated an "internally controlled investigation, providing no protections to assure impartiality." Plaintiff objected to the investigation, which led the Firm to immediately terminate her employment.

III. DISCUSSION

A. Personal Jurisdiction Over Dalton

A federal district court in Illinois has personal jurisdiction over a nonresident defendant involved in a diversity action only if an Illinois state court would have personal jurisdiction. Michael J. Neuman & Associates, Ltd. v. Florabelle Flowers, Inc., 15 F.3d 721, 724 (7th Cir. 1994) (citing Dehmlow v. Austin Fireworks, 963 F.2d 941 (7th Cir. 1992)). Plaintiff bears the burden of demonstrating the existence of personal jurisdiction, as she is the party asserting jurisdiction. Publications International, Ltd. v. Simon & Schuster, Inc., 763 F. Supp. 309, 310 (N.D. Ill. 1991); Wysnoski v. Millet, 759 F. Supp. 439, 442 (N.D. Ill. 1991) (citing Saylor v. Dyniewski, 836 F.2d 341, 342 (7th Cir. 1988)).

Dalton argues that she is a non-resident individual whose contacts with Illinois were made solely in the capacity of her employment, and thus, the fiduciary shield doctrine precludes this court from exercising personal jurisdiction over her. As Dalton argues, the fiduciary shield doctrine prevents the exercise of personal jurisdiction over an individual whose activities in Illinois were performed solely on behalf of her employer, corporation, or other principal. Rice v. Nova Biomedical Corp., 38 F.3d 909, 912 (7th Cir. 1994) (citations omitted); Kula v. J.K. Schofield & Co., Inc., 668 F. Supp. 1126, 1129 (N.D. Ill. 1987) (citations omitted). A defendant's ability to assert the fiduciary shield as a defense is not without limitation, however:

First, the fiduciary shield doctrine is discretionary or equitable, rather than an absolute entitlement, and should be applied only where equity demands it. Second, the doctrine will be removed if the defendant was acting also, or instead, to serve his own personal interests. Third, the discretion exercised by the individual is a factor that a court should consider when determining whether the fiduciary shield doctrine applies to a case. Interlease Aviation Investors II (Aloha), L.L.C. v. Vanguard Airlines, Inc., 262 F. Supp. 2d 898, 912 (N.D. Ill. 2003) (collecting cases; internal ...


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