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United States ex rel Howard v. Urban Investment Trust

March 8, 2010

UNITED STATES OF AMERICA, EX REL. ANN HOWARD, RELATOR,
v.
URBAN INVESTMENT TRUST, INC., AN ILLINOIS CORPORATION AND ITS SUCCESSOR, RM HOLDINGS; SYNERGY AFFILIATES, LLC, AN ILLINOIS LIMITED LIABILITY COMPANY, AND RUDY MULDER, ROXANNE GARDNER, AND JOHNNY TERZAKIS, INDIVIDUALS, DEFENDANTS.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

This case is before the Court on a motion by defendant Synergy Affiliates, LLC ("Synergy") for summary judgment [210]. For the following reasons, Synergy's motion is granted in part and denied in part. The motion is granted with respect to Count IV, and it is denied with respect to Count III.

BACKGROUND

Plaintiff Annie Howard ("Howard") began doing work for Urban Investment Trust, Inc. ("Urban") in June 2000 as Senior Residential Accountant. In her position at Urban, Howard had access to accounting information of the Chicago Housing Authority ("CHA"). Between 2000 and the summer of 2002, Urban was the property manager for residential and commercial properties owned and operated by the United States Department of Housing and Urban Development ("HUD") and the CHA. Urban had a contract with the CHA that prohibited Urban from using money in CHA-HUD accounts for any purposes other than those listed in the contract. Under the terms of the contract, Urban was permitted to deduct funds from the CHA accounts for housing expenses and payroll, but was prohibited from using government money for personal uses.

Synergy, a professional employer organization ("PEO"), contracted with Urban to provide payroll, benefits and human resources services to Urban and its employees. As a result of this relationship, Howard was on Synergy's payroll. Synergy and Howard agree that Urban and Synergy were essentially co-employers of Howard and the other employees. (Def.'s Resp. to Pl.'s Stmt. of Additional Facts ¶ 31.) Madeline Hernandez ("Hernandez") was assigned to act as Synergy's field representative with Urban. A field representative's responsibilities include assisting the client company (in this case, Urban) with various human resource issues, such as benefits selection and management of benefits programs. Urban provided Hernandez with an office, where she processed documents and was also available to meet and talk with employees.

Howard alleges that, in early 2000, she observed that the CHA bank accounts did not reconcile with the CHA tenant ledgers and that the money missing from the CHA accounts had been deducted by Urban without proper supporting documentation. Howard alleges that Urban manager Peter Mori ("Mori") told Howard that Urban would return the money to the CHA accounts by the end of the year and that she should reconcile the accounts as if the money were there. Howard reconciled the bank accounts to indicate that the withdrawals had never occurred. Howard alleges that this was the only time that she reconciled the bank accounts and that in April 2002, after Howard subsequently refused to further reconcile the accounts, Mori hired another employee who assumed many of Howard's responsibilities.

Howard alleges that she contacted Hernandez on multiple occasions to inform her of the alleged fraud and embezzlement occurring at Urban, and also to inform her that Howard was being harassed and pressured to participate in the supposed fraud. Howard claims that Hernandez responded by indicating that she would investigate the situation, but she then failed to take any action. The parties dispute whether these discussions actually took place, and if so, what the true substance of these discussions may have been.

Howard asserts that in February 2002, she met with criminal investigators from the CHA's Office of the Inspector General, answering their questions and telling them she believed Urban was engaged in fraud and embezzlement of CHA funds. Howard also asserts that she informed Hernandez of her meeting with CHA investigators sometime in February or March 2002.

On June 2, 2002, Howard decided to leave her employment at Urban because she felt she was being harassed, which she claims amounted to constructive discharge from her employment.

Plaintiff's Fourth Amended Complaint named as defendants Urban, RM Holdings, Rudy Mulder, Roxanne Gardner, Johnny Terzakis and Synergy, and it set forth four separate counts. Synergy is named in Counts III and IV. Count III is a claim of retaliation and constructive discharge, pursuant to 31 U.S.C. § 3730(h) of the False Claims Act. Count IV is a claim for intentional infliction of emotional distress.

Synergy filed the instant motion for summary judgment with respect to Counts III and IV on August 20, 2009, arguing that the undisputed facts show that Plaintiff is unable to prove the requisite elements of the claims against Synergy. Howard opposes the motion, insisting that genuine issues of material fact remain, and that both claims against Synergy should reach a jury.

LEGAL STANDARD

Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A genuine issue of material fact exists only if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 277, 248 (1986). Summary judgment is appropriate when the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex v. Catrett, 477 U.S. 317, 322 (1986). The existence of a factual dispute is not sufficient to defeat a summary judgment motion; instead, the nonmoving party must present definite, competent evidence to rebut the motion for summary judgment. See Butts v. ...


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