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Ryl-Kuchar v. Care Centers

June 16, 2008


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


On May 2, 2008, a ten-member jury concluded a four-day trial by returning a verdict in favor of plaintiff Kathleen Ryl-Kuchar and finding that defendant Care Centers, Inc., violated the Family and Medical Leave Act ("FMLA") when it cancelled Ryl-Kuchar's group health insurance after Ryl-Kuchar had taken an FMLA leave. The jury awarded Ryl-Kuchar $31,621.08 in damages [260]. After the jury returned its verdict, the court requested that the parties calculate prejudgment interest and liquidated damages and file any objections to the calculations by May 8, 2008 [257]. Two motions followed.*fn1 Care Center's filed a Motion for Judgment Notwithstanding the Verdict [263], arguing that the evidence adduced at trial is insufficient to support the jury's verdict. Ryl-Kuchar filed a Motion for Entry of Judgment Including Interest, Liquidated Damages, Attorneys' Fees, and Costs [261]. The court will address each in turn.

I. The Facts

In 2003, Kathleen Ryl-Kuchar was employed as a dietary consultant by Care Centers, Inc., which is in the business of providing consulting services for nursing homes. Ryl-Kuchar began working at Care Centers in 1985 as a part-time dishwasher and worked her way up to dietary consultant through the years. Dietary consultants were responsible for assisting the dietary managers of individual nursing homes with staffing, inventory, policies and procedures, sanitary checks, budgets, and menus, and could perform their duties from home so long as they had access to a phone, e-mail, and fax machine. (Trial Tr. vol. 1, 133-36, Apr. 28, 2008.) As a dietary consultant, Ryl-Kuchar was a salaried employee of Care Centers. That is, Ryl-Kuchar received from Care Centers a set wage every two weeks based on a 40-hour work week. She did not receive overtime pay if she worked more than 40 hours per week, and her wages were not docked if she worked fewer than 40 hours per week. (Trial Tr. vol. 1, 40-42, 137.) Ryl-Kuchar was not required to punch a clock but was required to submit time sheets. Regardless of whether her time sheets reflected greater or fewer than 40 hours per week, however, her salary did not fluctuate. Ryl-Kuchar still received her set salary based on a 40-hour work week. (Trial Tr. vol. 1, 53-58, 137.)

In January 2003, Ryl-Kuchar found out that she was pregnant with triplets. (Trial Tr. vol. 1, 138-39.) Approximately one month later, Ryl-Kuchar told Barb Balthazor of Care Center's human resource department that she was pregnant. (Trial Tr. vol. 1, 139-40, 149.) According to Ryl-Kuchar, Balthazor gave her an FMLA certification form and told her that she could take twelve weeks of FMLA leave. Ryl-Kuchar took the FMLA certification form to her doctor, asked the doctor to complete the form, and then returned the completed form to Care Centers. (Trial Tr. vol. 1, 145-48.) Ryl-Kuchar also met with Mark Steinberg, Chief Operating Officer of Care Centers Clinical, LLC, the company that manages Care Center's employees, who agreed to allow Ryl-Kuchar to work from her home during the pregnancy and agreed to pay RylKuchar while she did so. (Trial Tr. vol. 1, 37-38, 60-63, 143-45.) Ryl-Kuchar and Steinberg did not discuss how many hours per week Ryl-Kuchar would work from home. (Trial Tr. vol. 2, 286, Apr. 30, 2008.)

In mid-May 2003, Ryl-Kuchar began working from home because she was "too big to fit behind [the steering] wheel" of her car. (Trial Tr. vol. 1, 156-57.) Ryl-Kuchar could not recall the exact date she began working from home but explained that, even though she had stopped working in the field, she continued to fully perform her job duties. (Trial Tr. vol. 1, 158.) From her home, Ryl-Kuchar prepared budgets, food orders, and staffing schedules. She also held meetings in her home and communicated with the individual nursing facilities by telephone and facsimile. (Trial Tr. vol. 2, 185-88.) From her home, Ryl-Kuchar worked fewer than 35 hours per week. (Trial Tr. vol. 2, 269-73, 281-82; Def. Ex. 3.)

On July 17, 2003, Ryl-Kuchar gave birth to three healthy baby boys. She experienced no complications during the delivery and returned home with the triplets on July 21, 2003, where, she said, she continued working until the end of July or beginning of August. (Trial Tr. vol. 2, 191-94.) Ryl-Kuchar explained that, when she came home with the triplets, her three sisters were there to help, so she had time to "finish up the work that was left out there." (Trial Tr. vol. 2, 194.) When her sisters left, however, Ryl-Kuchar had "more [work with the triplets] than I could have ever imagined." (Trial Tr. vol. 2, 194.) Consequently, Ryl-Kuchar stopped doing work for Care Centers at that time but intended to resume her duties with Care Centers following her leave. Ryl-Kuchar could not pinpoint the date on which her FMLA leave started but testified that she intended to begin FMLA leave after the birth of her triplets. (Trial Tr. vol. 2, 195, 291-300, 320-21.)

In September 2003, Ryl-Kuchar spoke with Steinberg by telephone to tell him that she was "getting ready to come back to work." (Trial Tr. vol. 2, 195-96.) Ryl-Kuchar never returned to work at Care Centers, however, because she did not think that she could both take care of her children and perform her duties as a dietary consultant. Ryl-Kuchar resigned from Care Centers effective October 1, 2003. (Trial Tr. vol. 1, 40, 134; Trial Tr. vol. 2, 195-96.) RylKuchar considered her FMLA leave to have ended along with her employment on October 1, 2003. (Trial Tr. vol. 2, 305.)

During the time period at issue in this litigation, Care Centers offered group health insurance to its eligible employees through Humana, Inc. (Trial Tr. vol. 1, 39; Trial Tr. vol. 2, 198, 235, 319.) Prior to her resignation, Ryl-Kuchar maintained health insurance through the Humana plan, and Humana initially paid all of her pregnancy-related medical bills. (Trial Tr. vol. 2, 197-99.) In November 2003, however, Ryl-Kuchar's Humana insurance was cancelled, with a retroactive termination date of June 15, 2003. (Trial Tr. vol. 1, 38-39.) Humana then sought to (and ultimately did) recover from Ryl-Kuchar's health care providers amounts it had paid out on Ryl-Kuchar's behalf for "anything from 6/15 onwards." (Trial Tr. vol. 1, 101-03; Trial Tr. vol. 2, 209-10; Pl.'s Exs. C, D, K.) Ryl-Kuchar has not yet paid any of the outstanding medical bills related to her pregnancy. (Trial Tr. vol. 2, 350.)

According to Ryl-Kuchar, nobody from Care Centers told her that her group health insurance had been cancelled. (Trial Tr. vol. 2, 199.) Instead, Ryl-Kuchar said that she discovered that her insurance had been cancelled when, in approximately January 2004, "the medical bills . . . started coming in that they were not covered." (Trial Tr. vol. 2, 200.) Ryl-Kuchar telephoned Humana to find out why Humana was not paying the bills and was told that Care Centers had retroactively cancelled her insurance. (Trial Tr. vol. 2, 208-09.) Ryl-Kuchar also telephoned Care Centers' human resources director, who told her that Care Centers could do nothing about the bills because Ryl-Kuchar had been "terminated." (Trial Tr. vol. 2, 201-02.)

Gale Rothner ("Rothner"), the wife of Care Centers' owner Eric Rothner (Trial Tr. vol. 3, 453, May 1, 2008), was the impetus for the retroactive cancellation of Ryl-Kuchar's insurance. Rothner initiated cancellation of Ryl-Kuchar's group health insurance after Rothner determined that Ryl-Kuchar's employment status with Care Centers had changed from full-time to part-time in June 2003. (Trial Tr. vol. 3, 456-59.) Rothner holds the position of trustee of CCS Employee Benefits VEBA, Inc. ("CCS VEBA"), a voluntary employee benefits association established to administer health insurance benefits for Care Centers and its health care facilities. (Trial Tr. vol. 3, 451-52.) According to Steinberg, Rothner is not a Care Centers employee. (Trial Tr. vol. 1, 76-77.) As CCS VEBA's trustee, Rothner was responsible for collecting insurance premiums, ensuring that claims were funded, and performing audits to determine employee eligibility. (Trial Tr. vol. 3, 452-53.) Care Centers' employees sometimes referred to CCS VEBA as Care Centers' "insurance department." (Trial Tr. vol. 2, 422.)

Rothner testified that she first became aware of Ryl-Kuchar's pregnancy sometime in August 2003, after seeing a photograph of Ryl-Kuchar's triplets. Rothner explained that she had not received FMLA paperwork for Ryl-Kuchar, so she contacted Balthazor to inquire about Ryl-Kuchar's status with Care Centers. (Trial Tr. vol. 3, 455-56, 468.) Balthazor showed Rothner Ryl-Kuchar's FMLA certification form, which listed the date of Ryl-Kuchar's incapcaity as "from May 11th until 2 months post-delivery," but the form did not list a date on which Ryl-Kuchar was to begin FMLA leave. (Trial Tr. vol. 3, 502.) Balthazor also told Rothner that Ryl-Kuchar did not want to use her FMLA leave until "sometime in August." (Trial Tr. vol. 3, 487, 502.) Based on the information provided by Balthazor, Rothner, without contacting Ryl-Kuchar, determined that Ryl-Kuchar was not on FMLA leave. Rothner then requested copies of Ryl-Kuchar's time sheets from Care Centers. Upon Rothner's examination of Ryl-Kuchar's time sheets, Rothner determined that Ryl-Kuchar began working part-time hours during the week of June 15, 2003. Since it was Rothner's understanding that Care Centers' employees were required to maintain consistent, full-time hours to be eligible for insurance coverage under the Humana plan, Rothner concluded, again without contacting or notifying Ryl-Kuchar, that Ryl-Kuchar had become ineligible to participate in the plan as of June 15, 2003. (Trial Tr. vol. 3, 454-58, 483-87.) Rothner then requested a "termination of health benefits form" from Care Centers. Care Centers provided the form to Rothner, and Rothner directed Humana to terminate Ryl-Kuchar's benefits. (Trial Tr. vol. 3, 459-60.) As stated earlier, Rothner did not contact Ryl-Kuchar about her time sheets or FMLA leave, and CCS VEBA never directly notified Ryl-Kuchar that her health insurance had been terminated. (Trial Tr. vol. 3, 476, 487-89.)

Steinberg also reviewed Ryl-Kuchar's June and July 2003 time sheets and testified that he, too, believed Ryl-Kuchar's time sheets establish that she began working part-time on June 15, 2003. (Trial Tr. vol. 1, 70, 75.) Care Centers' employee handbook defines an employee as full-time if he or she is "regularly scheduled to work 35 hours or more per week" and part-time if he or she "regularly works a minimum of 20 hours but less than 34 hours per week." (Trial Tr. vol. 2, 235-36; Def. Ex. 2.) It is undisputed that Ryl-Kuchar's timesheets from June 15, 2003 to July 27, 2003 show that she worked fewer than 35 hours each week during that time period. It is also undisputed that during June and July 2003 Care Centers continued to pay Ryl-Kuchar her full 40 hour per week salary and to deducted health insurance premiums from Ryl-Kuchar's wages. (Trial Tr. vol. 1, 46-57; Def. Ex. 3.) Steinberg explained that Care Centers paid Ryl-Kuchar her full-time salary after June 15th even though her time sheets showed that she was working part-time hours because "nobody was paying attention to her -- to the time sheets." (Trial Tr. vol. 1, 70.) He recounted that early in 2003 Care Centers changed payroll procedures, "[s]o had the old system had been in place, we would have caught the fact that she was working less hours, would have changed her hours, would have changed her status a lot sooner." (Trial Tr. vol. 1, 71.) Steinberg testified that he believed Care Centers had officially changed Ryl-Kuchar's status from full- to part-time but could not identify the date when that "official" change occurred or any documents showing an "official" change in Ryl-Kuchar's status. (Trial Tr. vol. 1, 77.) Steinberg also testified that a full-time, salaried employee's paycheck stubs from Care Centers would always show 80 hours per two-week pay period, unless the employee had taken a vacation or "her employment status changed." (Trial Tr. vol. 1, 52-53.)

After Ryl-Kuchar's Humana insurance was cancelled, Rothner requested that COBRASource, Inc., send a COBRA notification packet to Ryl-Kuchar. (Trial Tr. vol. 3, 460-61.) John Blaida, the owner of COBRASource, testified that his company performed COBRA administration for CCS VEBA, which he believed was in the business of managing nursing homes. Blaida explained that COBRASource's function was to notify its clients' employees of their COBRA rights and, if the employee elected COBRA coverage, to collect insurance premiums, ensure that insurance coverage remained in place, and terminate coverage when appropriate. (Trial Tr. vol. 2, 402-03.) On November 26, 2003, COBRASource sent a COBRA notification letter to Ryl-Kuchar at "1200 Sioux Court, New Lenos [sic], Illinois 60451." (Trial Tr. vol. 2, 405, 408-10; Joint Ex. 8.) The return address on the envelope listed the sender as: "COBRASource, Inc., 15 Commerce Drive, Suite 105, Grayslake, Illinois 60030." (Trial Tr. vol. 2, 411.) Blaida testified that COBRASource received nothing back from either the post office, notifying it that the package was undeliverable, or from Ryl-Kuchar, electing COBRA coverage. (Trial Tr. vol. 2, 405-08.)

Ryl-Kuchar maintained that she never received a COBRA letter notifying her that her group health insurance had been cancelled. (Trial Tr. vol. 2, 216.) Ryl-Kuchar explained that when she resigned from Care Centers she did not intend to continue her medical coverage because her medical bills had been paid by Humana and she had made arrangements for her children to have health coverage under her husband's insurance plan. (Trial Tr. vol. 2, 333, 341.) She also explained that, even if she had received a letter from "COBRASource, Inc.," she would not have opened it because the face of the envelope did not identify that the letter was from Care Centers. (Trial Tr. vol. 2, 379-80.)

Ryl-Kuchar presented two claims to the jury. First, Ryl-Kuchar argued that Care Centers interfered with her right under the FMLA to continued health insurance. Second, Ryl-Kuchar argued that Care Centers retaliated against her for taking leave under the FMLA. As to Ryl-Kuchar's interferrence claim, the jury was instructed, without objection from either party, that:

To prove her first claim, of interference with her right under the Family and Medical Leave Act to continued health insurance, Plaintiff Kathleen Ryl-Kuchar has to prove the following by a preponderance of the evidence:

1. That she had a right to continued health insurance under the Family and Medical Leave Act; and

2. That Defendant Care Centers deprived her of that right. (Trial Tr. vol. 3, 658; Jury Instructions 8.) As to Ryl-Kuchar's retaliation claim, the jury was instructed, again without objection, that:

To prove her second claim, the Family and Medical Leave Act retaliation claim, Plaintiff Kathleen Ryl-Kuchar has to proveby a preponderance of the evidence:

1. That Defendant Care Centers retroactively cancelled her health insurance; and

2. That Defendant Care Centers would not have retroactively cancelled her health insurance had Plaintiff Ryl-Kuchar not taken leave under the Family and Medical Leave Act and everything else had been the same.

(Trial Tr. vol. 3, 658-59; Jury Instructions 9.) Care Centers denied that it interfered with Ryl-Kuchar's rights under the FMLA and denied that it retaliated against Ryl-Kuchar for having taken leave under the FMLA. (Trial Tr. vol. 3, 657; Jury Instructions 7.) Care Centers also claimed that Ryl-Kuchar did not make reasonable efforts under the circumstances to mitigate her damages. As ...

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