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Robinson v. Stanley

September 24, 2007


The opinion of the court was delivered by: James F. Holderman, Chief Judge


On August 24, 2006, pro se plaintiff Beverly Robinson ("Robinson") filed her ten-count complaint in the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois. On September 22, 2006, defendants Morgan Stanley and Discover Financial Services, LLC properly removed the case to federal court, on the basis of federal question and supplemental jurisdiction. See, 28 U.S.C. § 1331; 28 U.S.C. § 1367(a); (Dkt. No. 1). Now pending before the court are two separate motions to dismiss.

Defendants Morgan Stanley, Discover Financial Services, LLC, Tony DeLuca, Karen Dollmeyer, Carole Hoffman, Bernice Jee, Kelly McNamara-Corley, David Oppenheim, Kerry Piercy, David Sutter, and Vesela Zlateva ("the Morgan Stanley Defendants") have filed a Motion to Dismiss All of Plaintiff's Complaint Except for the Claims Set Forth in Counts I, Portions of Count II and Count IX Against Morgan Stanley. (Dkt. No. 20) ("the Morgan Stanley Defendants' Motion to Dismiss"). The Morgan Stanley Defendants' Motion to Dismiss is granted in part and denied in part. Count 1 (Retaliatory Discharge) is dismissed against all individual defendants; Count 2 (Illinois Whistleblower Act) is dismissed against all individual defendants and against defendant Morgan Stanley and defendant Discover Financial Services, insofar as it asserts claims under §§ 10 and 15 of the Illinois Whistleblower Act; Count 3 (Defamation) is dismissed without prejudice; Count 4 (Intentional Infliction of Emotional Distress) is dismissed with prejudice; Count 5 (Fraud) is dismissed without prejudice; Count 6 (Intentional Interference with Economic Relations) is dismissed with prejudice; Count 7 (Illinois Personnel Record Review Act) remains in its entirety; Count 8 (Illinois Equal Pay Act) is dismissed with prejudice; Count 9 (FMLA) remains in its entirety; and Count 10 (Breach of Contract) is dismissed insofar as it alleges breach of policies set forth in the Employee Handbook.

Defendants KPMG, LLP and Rocco deGrasse have also filed a Motion to Dismiss (Dkt. No. 17) ("KPMG's Motion to Dismiss"). KPMG's Motion to Dismiss is granted in its entirety.

Robinson is given until on or before October 15, 2007 to file a First Amended Complaint consistent with this opinion and order. Defendants are given until October 29, 2007 to answer or plead to the First Amended Complaint.


For purposes of addressing the pending 12(b)(6) motions, the court accepts as true the following facts, as set forth in the Complaint:

Plaintiff Beverly Robinson ("Robinson") worked in the Internal Audit Department of Morgan Stanley from October 2, 2000 until August 24, 2004. Throughout her employment, Robinson was located in the Discover Financial Services ("DFS") headquarters building in Riverwoods, Illinois.*fn1 Robinson began her career at Morgan Stanley as a Senior Auditor in October, 2000, and was promoted to Electronic Data Processing (EDP) Audit Supervisor in August, 2001. Although Robinson's mid-year review of September, 2001 stated that Robinson was meeting expectations, Robinson was reassigned to the position of Senior Auditor in January, 2002, after returning from almost two months of approved medical leave for major surgery. Along with her demotion and bad review, Robinson was placed "in the lower of two salary grade levels available for the Senior Auditor position." (Compl. ¶ 25). On February 20, 2002, while still working half days pursuant to her FMLA leave, Robinson was put on a corrective action plan.

Robinson's performance appears to have then improved significantly, as she received an "exceeds" performance rating on her mid-year review in July, 2002. However, in December, 2002, Robinson only received a "meets" performance rating. Robinson's boss*fn2 explained to her that Robinson received this rating because she did not exceed the "exceeds" performance rating from the first half of the year. Additionally, Robinson's boss told her that the July, 2002 evaluation could not be changed because Robinson had already signed it. At that point, Robinson began meeting with personnel in Human Resources ("HR"), her boss, and Department Vice President David Sutter ("Sutter") to discuss the proper criteria for performance evaluations. Robinson later asked that these meetings to be discontinued, due to Sutter's increasing retaliation against her for "taking him to HR." (Compl. ¶ 32). Robinson submitted her 2003 mid-year self evaluation, a positive review, and received no notification of any changes to it.

In October, 2003, Robinson informed Sutter that she wanted to raise some concerns to the Company Audit Director, who was Sutter's boss. Shortly thereafter, Sutter put Robinson on a 60-day corrective action plan, citing Robinson's desire to go over his head as one of the criticisms. Sutter also made reference to the first corrective action plan. During the meeting in which Sutter and Karen Dollmeyer ("Dollmeyer"), a representative from the Human Resources Department in Riverwoods, Illinois, gave Robinson the corrective action plan, Sutter warned Robinson not to discuss her concerns with anyone, "unless she could get the Company Audit Director in private, during the upcoming Morgan Stanley world-wide audit conference." (Compl. ¶¶ 8, 35). In December, 2003, after a restructuring of Robinson's department, Sutter gave Robinson a "needs improvement" year-end review. The October, 2003 corrective action plan was also extended for another 60 days, despite the fact that Sutter failed to obtain feedback from other employees, as requested by Robinson in her meetings with HR and Sutter in early 2003.

On or around February 5, 2004, Robinson delivered a memorandum of approximately twenty-four pages (plus attachments) to the Chief Financial Officer of DFS,*fn3 detailing legal, regulatory, tax, accounting, auditing, and personnel concerns that Robinson had uncovered as an auditor and as a non-auditor. Robinson had previously attempted to raise these issues through normal audit channels, "but each time was stopped and, in many cases, criticized for her efforts by her audit management." (Compl. ¶ 39). The following day, the CFO and Kelly McNamaraCorley ("McNamara-Corley"), head of the Law Department in Riverwoods, Illinois, informed Robinson that they were launching an investigation into the concerns Robinson had raised in her memo. At the request of the CFO and McNamara-Corley, Robinson began participating in the investgation by supplying additional information, including documents and names, relevant to the issues raised in Robinson's memo. The investigative team that was assembled to look into Robinson's allegations included David Oppenheim ("Oppenheim") from the Law Department in Riverwoods, Illinois, Bernice Jee ("Jee") from the Human Resources Department (located "somewhere other than Riverwoods, Illinois") (Compl. ¶ 10), Carole Hoffman ("Hoffman") from the Morgan Stanley Law Department in New York, an unnamed Audit Director from New York,*fn4 and Rocco deGrasse ("deGrasse") a principal of KPMG, along with other KPMG personnel. Early into the investigation ("after less than one day of meeting with Ms. Jee and Ms. Hoffman to discuss the personnel issues"), members of the investigative team tried to convince Robinson that she should leave the company and they offered to "package her out."

(Compl. ¶ 44). Robinson reported this attempt to force her to leave the company to the CFO and McNamara-Corley. McNamara-Corley "assured the Plaintiff she had a job in Audit." (Compl. ¶ 45). McNamara-Corley and the CFO agreed to continue the investigation into the personnel issues raised in Robinson's memo and to have deGrasse participate in this aspect of the investigation. However, deGrasse was seldom present during the investigation and he "left the room for the majority of the time" on the days that he did attend meetings of the investigative team. (Compl. ¶ 46).

On May 7, 2004, Robinson was given the results of the investigation in a meeting attended by herself, Oppenheim, Jee, Hoffman, and deGrasse. Robinson was told that the investigative team "did not determine any concerns in the audit area," and that they had also determined that there had been no FMLA violations or retaliation against Robinson, although the investigative team acknowledged that some of the personnel issues could have been handled better. (Compl. ¶ 48).

While the investigation was ongoing, Robinson also alleges that she was subjected to retaliation by members of the Audit Department. Sutter was aware that Robinson had instigated the investigation, and it was apparent to others in the Audit Department that Robinson was "spending her days in the Law Department and never at her desk." (Compl. ¶ 42). Furthermore, almost all of the investigation meetings took place in the same wing as the Audit Department.

Robinson reported this retaliation to the investigative team, who assured her that no retaliation would be tolerated. However, Robinson continued to be subjected to retaliation, as did the one or two people in the Internal Audit Department who still associated with Robinson at that time. Robinson reported the retaliation to Jee, Hoffman, and Kerry Piercy ("Piercy"), Vice President of Human Resources. On or around May 17, 2004, Piercy and another member of Human Resources met with Robinson and "informed her there had been no retaliation" against Robinson or others. (Compl. ¶ 50). No action was ever taken in response to the retaliatory conduct that Robinson continued both to experience and to report.

Shortly after the meeting with Piercy, Robinson's manager Vesela Zlateva ("Zlateva")*fn5 put Robinson on another corrective action plan. Piercy and Zlateva met with Robinson weekly to give Robinson updates of her performance. At these meetings, Zlateva "would read a list of complaints" about Robinson. (Compl. ¶ 54). Upon trying to discuss, correct, or question any of the items on Zlateva's list, Robinson was accused of arguing and not accepting feedback. In mid-June, 2004, the company provided Robinson with an outside coach. Nevertheless, on or around August 6, 2004, Robinson was given a Job-in-Jeopardy memo informing Robinson that if her performance did not improve, she would be terminated. On August 24, 2004 Robinson's employment with Morgan Stanley was terminated.

In her Complaint, Robinson brings allegations of retaliatory discharge (Count 1), continuing violations of the Illinois Whistleblower Act (Count 2), continuing tort of defamation (Count 3), intentional infliction of emotional distress (Count 4), fraud (Count 5), intentional interference with economic relations (Count 6), violation of the Illinois Personnel Record Review Act (Count 7), Illinois Equal Pay Act against Morgan Stanley (Count 8), continuing violation of the Family and Medical Leave Act (Count 9), and breach of contract (Count 10).

In their Motion to Dismiss, the Morgan Stanley Defendants seek dismissal of all of Robinson's Complaint, with the exception of certain claims set forth in Counts 1, portions of Count 2, and Count 9 against Morgan Stanley. (Dkt. No. 20). In KPMG's Motion to Dismiss, defendants KPMG and deGrasse seek dismissal of Robinson's fraud claim and her claim against deGrasse under the Illinois Whistleblower Act. (Dkt. No. 17).


Under the Federal Rules of Civil Procedure, a complaint generally need not contain more than "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In other words, the complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1969 (May 21, 2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). So long as the factual allegations in the complaint "raise a right to relief above the speculative level," the complaint will withstand a 12(b)(6) challenge. Twombly, 127 S.Ct. at 1965; see also Pisciotta v. Old Nat'l Bancorp, ___ F.3d ___, No. 06-3817, 2007 WL 2389770, at *3 (7th Cir. Aug. 23, 2007). In conducting its analysis, the court assumes that all well-pleaded allegations in the complaint are true. Twombly, 127 S.Ct. at 1965. However, a plaintiff can plead herself out of court if a complaint includes facts that undermine its own allegations. Kolupa v. Roselle Park Dist., 438 F.3d 713, 715 (7th Cir. 2006).

As a general matter, "[c]complaints need not anticipate or attempt to defuse potential defenses." Doe v. Smith, 429 F.3d 706, 709 (7th Cir. 2005). On the other hand, a plaintiff alleging a claim of fraud or mistake must plead with specificity the who, what, where, and when of the alleged fraud or mistake. Fed. R. Civ. P. 9(b); Fidelity Nat. Title Ins. Co. of New York v. Intercounty Nat. Title Ins., 412 F.3d 745, 749 (7th Cir. 2005).


In this case, the Morgan Stanley Defendants seek dismissal of each of Robinson's ten counts, or at least some portion thereof. The court in this opinion addresses each count in turn, in the order in which it was alleged in the Complaint.

1. Count 1 -- Retaliatory Discharge

In Count 1 of her Complaint, Robinson alleges a common law cause of action for retaliatory discharge against Morgan Stanley, DFS, and six of the individual Morgan Stanley defendants. Under Illinois law, only Robinson's employer can be held liable for the tort of retaliatory discharge. See Buckner v. Atlantic Plant Maintenance, Inc., 694 N.E.2d 565, 570 (Ill. 1998) (holding that "the only proper defendant in a retaliatory discharge action is the plaintiff's former employer."). The Supreme Court of Illinois has held that there is no common law cause of action for retaliatory discharge against "agent[s] or employee[s] of the employer who carried out the discharge of the plaintiff on the employer's behalf." Id. at 569. At the outset of her Complaint, Robinson alleges that she "is a former employee of Morgan Stanley." (Compl. ¶ 1). Robinson also specifically states that she "worked in the Internal Audit Department of Morgan Stanley . . . from on or around October 2, 2000 through on or around August 24, 2004." (Compl. ¶ 17). Count 1 thus appears to be aimed at Robinson's former employer, Morgan Stanley.

On the other hand, Robinson also alleges that "throughout her employment by Morgan Stanley, [she] was located in the Discover Financial Services (DFS) Headquarters building." (Compl. ¶ 1). DFS is a wholly-owned subsidiary of Morgan Stanley, (Compl. ¶ 3), and Robinson asserts that "[t]he Defendants have repeatedly claimed the Plaintiff worked for DFS."

(Dkt. No. 35 at 3). Recognizing that the true identity of Robinson's former employer as alleged in her Complaint remains an unanswered question of fact, Robinson has brought ...

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