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Kay Moehring v. Kifco

December 12, 2012

KAY MOEHRING, PLAINTIFF,
v.
KIFCO, INC., DEFENDANT.



The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:

E-FILED

Wednesday, 12 December, 2012 03:01:38 PM Clerk, U.S. District Court, ILCD

OPINION

This matter comes before the Court on Defendant Kifco, Inc.'s (Kifco) Motion for Summary Judgment (d/e 25) (Motion). The parties consented, pursuant to 28 U.S.C. § 636(c), to have this matter proceed before this Court. Consent to the Exercise of Jurisdiction by a United States Magistrate Judge, and Order of Reference entered November 16, 2011 (d/e 10). Plaintiff Kay Moehring alleges that Kifco discharged her because of her age in violation of the Age Discrimination in Employment Act (ADEA), 29 § 621 et seq. Complaint (d/e 1). Kifco now moves for summary judgment. For the reasons set forth below, the Motion is ALLOWED.

STATEMENT OF FACTS

Plaintiff Kay Moehring was born on September 20, 1942. She began working for Kifco in 1989. Kifco is located in Havana, Illinois. Kifco manufactures irrigation equipment. Kifco's primary product is a piece of equipment called a water reel. A water reel has a long hose wound around a reel. At the end of the hose is a small cart with a sprinkler. The hose is unwound and extended across the area to be irrigated. When the water is turned on, the sprinkler spreads the water to the area to be irrigated, and the machine reels in the hose slowly. When the hose is completely reeled in, the water automatically shuts off. Plaintiff's Exhibits to Her Response to Defendant's Motion for summary Judgment (d/e 31) (Plaintiff's Exhibits), Exhibit 4, Deposition of Virgil Cox (Cox Deposition), at 17. Kifco manufactures water reels that are used in open areas such as sports fields, golf courses, and cemeteries. Kifco also imports the parts from Italy for larger water reels and assembles them in Illinois. Cox Deposition, at 21-22. The Italian reels are used in agriculture. Plaintiff's Exhibits, Exhibit 2, Deposition of Kelly Hagedorn (Hagedorn Deposition), at 16-18.

In 2006, Kifco President and CEO Ray Francis made Moehring Kifco's office manager. As the office manager, Moehring entered payroll data on the computer system and distributed payroll checks. She sent employees' 401K contributions to the John Hancock Company where the accounts were held. She entered the hours worked for hourly employees. She ran payroll reports. She issued and signed the checks to pay the accounts payable. She wired funds to Italy to pay invoices. She printed and kept copies of engineering reports. She purchased supplies. She handled the mail. She took the computer backups to the bank to place in a lockbox. She typed correspondence. She prepared a monthly report on employees' accrued vacation time. She prepared expense reports for traveling sales personnel. She called past due accounts receivable accounts. She also talked to customers and dealers. Plaintiff's Exhibits, Exhibit 1, Deposition of Kay Moehring (Moehring Deposition), at 79-80, 118-19.

Francis testified that Moehring's work performance was "fantastic." Plaintiff's Exhibits, Exhibit 3, Deposition of Ray Francis (Francis Deposition), at 55. Francis testified that Moehring was able to use the company's accounting software, called Made 2 Manage or M2M. Francis Deposition, at 55-60. Francis stated that M2M was a very advanced accounting software package. Francis Deposition, at 52-53. The Kifco national sales manager Mitchell Maddox testified that Moehring was very effective in assisting the sales department. She assisted in setting up training sessions and in dealing with customers and dealers on the phone. Plaintiff's Exhibits, Exhibit 5, Deposition of Mitchell Maddox (Maddox Deposition), at 48-49. Maddox described her as a "go-to for everything" person. Maddox Deposition, at 110.

Moehring worked with two other office staff. At the time of her termination, the two other staff members were Tammy Danner and Ledena Clark. Danner was the accounting assistant. She had experience and training in bookkeeping. She checked prices charged by vendors. She entered payable information on the computer system. She posted journal entries. She posted cash receipts and produced statements to send to dealers. She worked with Kifco's IT provider. Hagedorn Deposition, at 39-40, 41. Clark was the receptionist/billing clerk. She did all of the invoicing of customers. She answered phones and assisted with marketing-related projects. She sent out communications to dealers and sales prospects. Hagedorn Deposition, at 40.

In October 2006, Francis hired Kelly Hagedorn as Kifco's Chief Financial Officer (CFO). Francis testified that in early 2007, Hagedorn commented to Francis that, "we [Kifco] had a lot of old-timers there, a lot of older people . . . ." Francis Deposition, at 63-64.

Moehring reported directly to Hagedorn from the time that Hegedorn joined Kifco as CFO until Moehring's termination in 2009. Hagedorn testified in her deposition that she wanted Moehring to supervise Danner and Clark, but Moehring did not view herself as a manager and did not act as a manager. Moehring Deposition, at 70-72; Hagedorn Deposition, at 30. In addition, Hagedorn testified that she tried to train Moehring two or three times to post journal entries, but could not because Moehring did not understand accounting debits and credits and did not understand the use of general ledger accounts. Hagedorn Deposition, at 41-43. Hagedorn ultimately assigned the task of the posting of journal entries to Danner because of her bookkeeping experience and training. Hagedorn Deposition, at 46.

In 2007, a private equity group called Prairie Capital owned Kifco. Prairie Capital planned to sell the company. Francis objected to the idea to sell. Prairie Capital asked Francis to leave. Prairie Capital paid Francis a bonus and a year's salary as his severance package. Francis Deposition, at 38-39. Francis testified in his deposition that he was happy to leave at the time and under the separation terms. Id. Upon Francis' departure in 2007, Hagedorn became President/CFO of Kifco. Id.

On or about March 20, 2008, a private holding company called Irrigation Holdings bought Kifco from Prairie Capital. Hagedorn Deposition, at 56. Two brothers, Chris and John Clevenger, each owned approximately 46 percent of the Irrigation Holdings. Hagedorn owned approximately 4 percent and three other management personnel at Kifco owned the remaining approximately 4 percent. Hagedorn Deposition, at 15. Chris Clevenger (Clevenger) became Kifco's Chief Executive Officer (CEO). Irrigation Holdings did not own any business other than Kifco.

Hagedorn testified that Kifco experienced a downturn in business with the recession in 2008. The downturn continued in 2009 and 2010. Hagedorn Deposition, at 25. Kifco financial records showed revenues and gross profits dropped substantially each year from 2007 through 2010. Memorandum of Law in Support of Motion for Summary Judgment (d/e 26), Confidential Exhibit 2 (d/e 27), Attachment 4, Income Summary and Balance Sheet Summary. Kifco management responded by instituting several cost-cutting measures. In November 2008, Kifco suspended interest payments on its subordinated debt. Clevenger stopped taking any salary for a year, beginning in December 2008. Hagedorn Deposition, at 38-39. In 2009, Hagedorn took a 30 percent pay cut, Kifco instituted 20 percent pay cuts for full time employees, and some full time employees were put on "a rolling layoff, 50 percent on, 50 percent off." Hagedorn Deposition, at 53. Kifco laid off its temporary seasonal help. ...


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