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Betty A. Jacober v. United States Department of Agriculture Agency

September 17, 2012

BETTY A. JACOBER, PLAINTIFF,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE AGENCY, AND GARY MERSINGER, DEFENDANTS.



The opinion of the court was delivered by: Stiehl, District Judge:

MEMORANDUM & ORDER

Before the Court are three pending motions: (1) defendants' consolidated motion to dismiss Counts 3 and 4 and all allegations of constructive or wrongful discharge (Doc. 44), to which the plaintiff filed a response (Doc. 50); (2) defendants' consolidated motion to dismiss defendants Gary Mersinger ("Mersinger") and the United States Department of Agriculture ("USDA") (Doc. 45), to which plaintiff did not file a response; and (3) defendants' consolidated motion for summary judgment (Doc. 53), to which the plaintiff has filed a response (Doc. 54), and defendants a reply (Doc. 57).

BACKGROUND

This cause of action arises from plaintiff's employment with and eventual resignation from the USDA. Plaintiff was employed by the USDA from approximately June 30, 1997, to April 11, 2008. The pertinent facts regarding plaintiff's employment at the USDA follow.

During her tenure, plaintiff worked as a Rural Development Specialist (a loan specialist) at the USDA Service Center located in the city of Edwardsville, in Madison County, Illinois. As a loan specialist, plaintiff's job duties included promoting the Rural development loan program, and reviewing credit reports, income, and home appraisals for low income home buyers within a five county area.

Defendant Mersinger was a Rural Development Manager, and plaintiff's supervisor at the service center from June 30, 1997 until October 1, 2007. Next in plaintiff's supervisory chain of command was James "Rusty" Wanstreet, District Area Director, followed by Douglas Wilson ("Wilson"), State Director, and Marianne Nixa ("Nixa"), Wilson's assistant, and finally, the chain ended with the National Directors. As of October 1, 2007, the management system was restructured, and Janet Fauth ("Fauth") became the Edwardsville office "office manager," but had no supervisory authority.

Stepping back a few years, during the summer of 2005, plaintiff and Gale Bolen ("Bolen"), plaintiff's co-worker who was employed as a technician at the Edwardsville office, contacted Nixa, to inform her about "concerns" they had about Mersinger. Nixa set up a mediation among the three parties and Ronald Garland ("Garland"), a USDA employee relations specialist. At the mediation, held on July 28, 2005, the parties discussed their issues, which Garland described generally as their inability to work well together as a team (Doc. 53-5 at 8). At her deposition, plaintiff stated that the issues included Mersinger not answering her questions right away, and Mersinger requesting that plaintiff refer to the appropriate regulations instead of just telling applicants that Mersinger would not approve a loan. At the end of the mediation, plaintiff, Bolen, and Mersinger signed an agreement regarding the ways in which each of them would alleviate the various issues, for example, each would fill out their calendar, they would hold weekly workload priority meetings, etc. (Doc. 53-6).

No informal or formal EEO complaint was filed with respect to plaintiff and Bolen's concerns in 2005, and there was no mention whatsoever of issues of race, color, religion, sex, national origin, age, disability status, or retaliation from previous EEO activity at the mediation or in the signed mediation agreement. Garland stated under oath that the mediation was not an EEO complaint (Doc. 53-5 at 11). Plaintiff claims, that she believed this to be an EEO complaint, but produces no evidence whatsoever to support this claim.

Nearly two (2) years later, in March of 2007, plaintiff and Bolen drove together to a training meeting in Peoria, Illinois. Upon their return, Mersinger questioned plaintiff as to why it took so long for them to return from their trip. Plaintiff told Mersinger that they had to stop during the drive to take breaks due to her back pain. She asserts that Mersigner was aware of her back issues, but accused her of wrongdoing, namely, what plaintiff terms "travel fraud," as a form of retaliation. After a "heated" discussion regarding the appropriate amount of leave time, plaintiff took some leave time for the return trip from Peoria.

Also in 2007, plaintiff was involved in an investigation of possible loan fraud regarding Mary Goode ("Goode"), an outside real estate agent and contractor who frequently worked with the Rural Development program. While it is difficult to determine the exact date that suspicions arose regarding transactions with Goode, the record reflects that Mersinger vocalized concerns as early as February 20, 2007, at which time he asked plaintiff if she remembered anything unusual regarding a particular loan closing involving Goode, which the USDA later discovered included an altered loan document (Doc. 53-12 at 2). Mersinger voiced his suspicions again on May 22, 2007 (Doc. 53-9), at which time he emailed plaintiff and Bolen about certain issues with a loan closing involving Goode. The following day, May 23, 2007, Mersinger sent another email to plaintiff and Bolen stating that no side agreements would be allowed regarding the same Goode closing (Doc. 53-10). Mersinger also expressed his concerns to Barry Ramsey ("Ramsey"), Illinois Housing Program Director, in May of 2007 (Doc. 53-8 at 4-5). At some point thereafter, plaintiff became aware that she, along with Bolen, was being investigated by the USDA with respect to her dealings with Goode.

Later that year, in June or July 2007, during plaintiff's performance evaluation, she was told by Mersinger that she did not project a professional image because she was too friendly and personal with customers, homebuilders, and lenders (Doc. 53-14).

On July 16, 2007, plaintiff emailed images of Mersinger to Nixa, asking her whether the photographs of Mersinger projected a professional image of the USDA (Doc. 53-14). The images included two (2) photographs of Mersinger wearing bib overalls, a hardhat, toolbelt, and boots, with his arms crossed at his chest. Mersinger was not wearing a shirt beneath the overalls. Julie Sweetin ("Sweetin"), an intern, testified that she came up with the idea to take these photographs to add some humor to an otherwise dry powerpoint presentation she was preparing (Doc. 53-7 at 3-4). The powerpoint also included pictures of Sweetin in a similar outfit, but wearing a sleeveless shirt beneath the overalls. While plaintiff first referred to these photographs as "unprofessional," she later filed a complaint in which she claimed that the photographs were a form of sexual harassment.

On August 7, 2007, plaintiff submitted an informal EEO complaint in which she alleged Mersinger subjected her to sexual harassment on July 13, 2007, when he had a student female employee take shirtless pictures of him; that plaintiff complained to Nixa about Mersinger's behavior and in response Nixa "attacked" her for an unrelated event; that even though she received a recent positive mid-year performance appraisal, Mersinger "underlined points" in her appraisal and verbally stated that she was deficient; and that Mersinger made remarks about her known disability (back pains) (Doc. 54-3).

On October 1, 2007, the Edwardsville office was restructured: Mersinger was no longer plaintiff's supervisor, and Fauth joined the office, taking on a number of different tasks. At this point, plaintiff's job changed so that rather than working in five (5) counties, she thereafter only worked in three (3). The office loan goals remained the same however, and the responsibility to reach those goals was shared by plaintiff, Fauth, and the other office members. On October 3, 2007, two days after the office restructuring, plaintiff filed a formal complaint with the USDA, alleging sexual harassment and retaliation by her former supervisor, Mersinger (Doc. 38 at 2).

On November 13, 2007, Wilson, USDA State Director, sent a letter to plaintiff proposing to suspend plaintiff for 5 days without pay as a result of his investigation into plaintiff's dealings with Goode, to which plaintiff was allowed to and did file a reply. On November 28, 2007, Wilson sent a letter to plaintiff notifying her of the decision he had reached after consideration of her reply (Doc. 54-4). Wilson determined that: plaintiff admitted to omitting from the loan record any information regarding an altered document that she was aware of, and that her acceptance of a fraudulent document could not be justified by plaintiff's claim that she was "too busy"; plaintiff did not inform Mersinger of the altered document, but allowed the closing to proceed, which resulted in $6000 of loan and grant funds being paid to Goode at the closing, even though those funds should have been applied to the borrowers' account to pay down their loan; plaintiff and Bolen withheld knowledge of the fraudulent inspection document*fn1 when Mersinger asked them both about it at a meeting on February 20, 2007; plaintiff gave Goode preferential treatment by approving a loan closing where funds were paid to Goode based on fraudulent and inadequate documentation; plaintiff's referral of Goode's nephew and employee, Caleb Goode, to Ron Bolen undermined the agency's efforts to make an orderly assessment of the pay-off calculations for this account and interfered with an ongoing appeal; and this action was taken against the decisions made by both Mersinger and the Illinois Housing Program Director, Barry Ramsey, and was done to assist Goode and her family members.

In his decision letter, Wilson expressed concern that plaintiff did not understand the seriousness of her actions as evidenced by her misrepresentation of the issues. Wilson determined that plaintiff engaged in inappropriate conduct in her dealings with Goode, and that this determination was supported by the evidence and warranted a suspension from duty. Plaintiff was suspended without pay for five (5) working days from December 6, 2007, through December 12, 2007.

Regarding plaintiff's ongoing EEOC complaint, on January 7, 2008, the USDA accepted an amendment to the EEOC complaint previously submitted by plaintiff, and referred for investigation the following claims:

Whether the agency subjected the complainant to discriminatory harassment (non sexual) based on age (D.O.B.: 5/18/1946), sex (female), physical disability (acute back pains), and reprisal (prior EEO activity) when allegedly:

1. on December 6, 2007, complainant was placed on suspension without pay for 5 days;

2. complainant's supervisor had a 21 year old female student employee take a shirtless picture of him, under the disguise [sic] of work related; and

3. complainant's supervisor made a statement in her mid-term review that "she did not project a professional image as a USDA employee and that she was unprofessional in her conduct?

(Doc. 54-3 at 4). Approximately three (3) months later, on April 11, 2008, plaintiff resigned from her position, but alleges that her resignation was "involuntary" (Doc. 38 at 3).

On March 11, 2010, after conducting an administrative review, the EEOC issued a final order in favor of the USDA, and allowed a ninety (90) day period during which plaintiff could file suit. This cause of action was filed pursuant to that order (Doc. 2 at 7).

Plaintiff's Second Amended Complaint (Doc. 38) consists of four enumerated Counts: (I) sexual harassment, (II) retaliation, (III) intentional infliction of emotional distress, and (IV) violation of the Family Medical Leave Act ("FMLA"). Plaintiff also makes general allegations of wrongful or constructive discharge throughout her complaint.

Defendants filed two motions to dismiss (Docs. 44, 45) and a consolidated motion for summary judgment (Doc. 53), in which defendants incorporate all of the arguments from their motions to dismiss, and further assert that plaintiff cannot establish a prima facie case for sexual harassment, retaliation, intentional infliction of emotional distress, FMLA interference, or constructive discharge.

Plaintiff filed a response to defendants' first motion to dismiss (Doc. 50), in which she essentially concedes that she "did not make any complaint with the Agency or give notice under F.M.L.A. or a state tort for the intentional infliction of emotional distress as pled under Counts III and IV." (Doc. 50, at 3 para. 11). Plaintiff then requests that defendants' motion to dismiss be denied as to the retaliation claim. The only response from plaintiff that the Court can locate in the record with respect to defendants' second motion to dismiss (Doc. 45), is plaintiff's one sentence request in her response to defendants' first motion to dismiss, in which she requests leave to file an amended complaint as to Counts I and II (Doc. 50). Plaintiff does not state any reason or support whatsoever for this bare and belated request and, and it is therefore DENIED. Plaintiff also filed a response to defendants' motion for summary judgment (Doc. 54), in which she does not provide any further response to defendants' motions to dismiss, and, in sum, asserts that she has established a prima facie case for sexual harassment, retaliation, intentional infliction of emotional distress, FMLA interference, and constructive discharge.

LEGAL STANDARD

At this stage of the proceedings, the Court must determine whether it shall proceed pursuant to the motion to dismiss legal standard,*fn2 or whether it may consider all arguments pursuant to the summary judgment standard.

In general, if a court treats a motion to dismiss as one for summary judgment, failure to "provide the litigants with notice and an opportunity to respond can constitute reversible error." Travel All Over the World, Inc. v. Kingdom of Saudi Arabia, 73 F.3d 1423, 1430 (7th Cir. 1996). "Adequate notice is provided when the moving party frames its motion in the alternative as one for summary judgment." Tri-Gen Inc. v. Int'l Union of Operating Eng'rs, Local 150, AFL-CIO, 433 F.3d 1024, 1029 (7th Cir. 2006). Based upon this premise, defendants' motion for summary judgment effectively converted its previous motions to dismiss into motions for summary judgment, and defendants repeatedly put plaintiff on notice of their intentions to do so (stating no less than three times, on pages 1, 18, and 20, of Doc. 53 that defendants incorporate their motions to dismiss into their motion for summary judgment).

In light of the fact that defendants explicitly stated their desire to incorporate all of their arguments for dismissal into their motion for summary judgment, plaintiff cannot claim surprise or prejudice for lack of separate and explicit notice from this Court of its intentions to treat the motions to dismiss as motions for summary judgment. See Ninth Ave. Remedial Grp. v. Allis-Chalmers Corp., 195 B.R. 716, 722 (N.D. Ind. 1996). Defendants submitted a number of exhibits in support of their motion for summary judgment, and incorporate by reference their previous motions to dismiss on at least three occasions. Plaintiff, in response, filed a number of supporting documents in opposition to defendants' motion for summary judgment. Discovery has concluded in this case and both parties have had opportunities to present any materials they desired.

The Court need not, therefore, in these particular circumstances, give additional notice or warning that it will consider matters outside of the pleadings. Plaintiff had the opportunity to respond to each of defendants' arguments with any evidentiary support (outside of that which had been previously barred) that it wished. In light of this, the Court will proceed pursuant to summary judgment standards, and consider the additional evidence submitted in support of and in response to the motions (to the extent it was not previously barred or otherwise inadmissible), and is not limited to the complaint, any exhibits attached thereto, and supporting briefs. See Thompson, 300 F.3d at 753.

Summary judgment is proper when the record, "including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials," show there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The Court must draw all reasonable inferences and resolve all factual disputes in favor of the non-movant. Malen v. MTD Products, Inc., 628 F.3d 296, 303 (7th Cir. 2010). A court cannot grant summary judgment if a genuine dispute relates to a material fact, meaning that "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The non-movant must "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 Corp. v. Catrett, 477 U.S. 317, 322 (1986). If the non-movant fails to establish an essential element, there is a complete failure of proof and the moving party is entitled to judgment as a matter of law. Id. at 323. Furthermore, the non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Where the "evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).

With respect to plaintiff's Title VII claims, "[w]hen a federal employee files a Title VII suit in federal court, the district court charged with deciding that action is required to perform a de novo review of the record, including administrative agency proceedings." Smith v. Potter, 445 F.3d 1000, 1011 (7th Cir. 2006). Thus, this Court need not "defer to the determination of an administrative agency in an action which falls under Title VII of the Civil Rights Act of 1964." Id.

ANALYSIS

I. Title VII Claims: Sexual Harassment; Retaliation; General Claims of Constructive Discharge In the context of federal employment, "[t]he only proper defendant in a Title VII suit is the head of the agency accused of having discriminated against the plaintiff." McGuinness v. United States Postal Serv., 744 F.2d 1318, 1322 (7th Cir. 1984); 42 U.S.C. § 2000e-16(c). Counts I and II, and plaintiff's general claims of constructive discharge contained within plaintiff's second amended complaint, are subject to these provisions. Plaintiff has only named Mersinger, an individual, and the USDA, as defendants and, therefore, the Secretary of the Agency, the only proper party with regard to these claims, has not been named.

"Improper denomination of defendants may be waived by the government." Bavido v. Apfel, 215 F.3d 743, 747 (7th Cir. 2000). The government did not waive improper denomination, however, and instead, seeks dismissal of the incorrectly named defendants. New parties, however, "may be . . . added by order of the court on . . . its own initiative at any stage of the action and on such terms as are just.'" Id. at 747 n.3 (quoting Fed. R. Civ. P. 21). Additionally, Fed. R. Civ. P. 15(c) provides that "an amendment changing a party relates back to the date of the original pleading if the party being added is a federal agency and process was timely served on the United States Attorney (or designee), the Attorney General, or an 'agency or officer who would have been a proper defendant if named.'" 215 F.3d at 747, n.3 (quoting Fed. R. Civ. P. 15(c)).

Instead of dismissing these claims at this late stage in the proceedings, the Court notes that the U.S. Attorney's office has been on notice of these claims since the beginning of the proceedings, and the U.S. Attorney's office, in fact, defended the case on behalf of both Mersinger and the USDA. In light of this, the risk of prejudice to the government as a result of party substitution is very low, and the interests of justice would be best served by simply substituting the proper party at this point in accordance with Fed. R. Civ. P. 15 and 21, instead of requiring the refiling of motions and responses which have already addressed the substance and merits of the issues in this case. See id. The Court, therefore, FINDS that this issue would be justly and most expeditiously resolved by substituting the proper defendant instead of dismissing plaintiff's claims and requiring the plaintiff to start over in federal court, which would be an enormous waste of the resources already expended to develop the case to its current state. See id.

The Court, therefore, HEREBY DISMISSES defendant Mersinger and defendant USDA as to Counts I and II, and any claims of constructive discharge contained in plaintiff's second amended complaint, and SUBSTITUTES Tom Vilsack, Secretary of the Department of Agriculture, as the proper party defendant to plaintiff's claims arising under Title VII, namely, Counts I and II and any claims of constructive discharge alleged in plaintiff's second amended ...


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