Summary
reaffirming denial of summary judgment on the applicability of § 181.970 in a negligence claim brought by an employer against an employee
Summary of this case from Cenveo Corp. v. Celumsolutions Software Gmbh & Co. KgOpinion
Civil No. 04-2676 (JRT/RLE).
February 11, 2005
Patrick M. Connor, CONNOR SATRE SCHAFF, 3440 Federal Drive, Suite 120, Eagan, MN 55122, for plaintiff.
Megan A. Blazina and Thomas A. Harder, FOLEY MANSFIELD, 250 Marquette Avenue, Suite 1200, Minneapolis, MN 55410, for defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Kay Carlsen ("Carlsen") brought an action against her former employer, defendant Experience Works, Inc., f/k/a Green Thumb, Inc. ("Green Thumb") alleging disability discrimination and violations of the Family Medical Leave Act ("FMLA"). Green Thumb counterclaimed seeking to recover $62,000 in disallowed costs that allegedly resulted from Carlsen's negligence in performing her job. In an order dated February 4, 2004, this Court granted Green Thumb's motion for summary judgment as to Carlsen's claims of disability discrimination and retaliation under the FMLA, but denied Green Thumb's motion for summary judgment as to Carlsen's claim of interference under the FMLA. Carlsen v. Green Thumb, Inc., 2004 WL 234406 (D. Minn. Feb. 4, 2004). The Court also denied the parties' cross-motions for summary judgment on Green Thumb's counterclaim. Id.
Carlsen then filed this motion seeking indemnification from Green Thumb on the counterclaim based on Minnesota Statute §§ 181.970 and 317A.521. Green Thumb moved for summary judgment, arguing that: (1) Minnesota Statute § 317A.521 does not apply to Green Thumb because Green Thumb is not a domestic corporation; (2) Minnesota Statute § 181.970 is superseded by statutes from the District of Columbia, which is where Green Thumb is incorporated; and (3) Carlsen is not entitled to indemnification because she did not act in good faith. For the reasons stated below, the Court grants Green Thumb's motion in part and denies it in part.
ANALYSIS
I. Standard of Review
Summary judgment is appropriate in the absence of any genuine issue of material fact and when the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit, and a dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). A court considering a motion for summary judgment must view all of the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
II. Section 317A.521
Minnesota Statute § 317A.061 provides that, "[e]xcept for this section and section 317A.651 concerning merger or consolidation, this chapter does not apply to foreign nonprofit corporations." Therefore, argues Green Thumb, Minnesota Statute section 317A.521 does not apply in this case because Green Thumb is a District of Columbia non-profit corporation and section 317A.521 only applies to domestic non-profit corporations. The Court is not aware of any Minnesota cases that have interpreted this statute, but, based on the plain reading of the statute, the Court finds that section 317A.521 does not apply to Green Thumb in this case because Green Thumb is not a domestic corporation. Therefore, the Court grants Green Thumb's motion for summary judgment as to Carlsen's claim under Minnesota Statute § 317A.521.
Green Thumb also argues that section 317A.521 only applies if Carlsen is being sued in her official capacity, see Minn. Stat. § 317A.521, subd. 2(a), and that Green Thumb is suing Carlsen in her personal capacity. See Brown v. United States, 486 F.2d 284, 288 (8th Cir. 1973) (stating that a personal capacity suit involves a claim that the "defendants failed to exercise reasonable care in their personal capacities"). Carlsen failed to address either of Green Thumb's arguments in regards to section 317A.521 in her brief to the Court. The Court need not consider this argument as Green Thumb's first argument is dispositive of this issue.
III. Section 181.970
Subdivision 1 of Minnesota Statute § 181.970 describes when an employer is required to indemnify an employee. Subdivision 2(3), however, states that subdivision 1 does not apply when there are "similar laws of . . . another state specifically governing indemnification of employees of . . . nonprofit corporations." Green Thumb argues that it is governed by "similar laws" of the District of Columbia governing indemnification and, therefore, section 181.970 does not apply in this case. See DC Code §§ 29-301 et seq.
The District of Columbia statutes Green Thumb relies on, however, provide for a limitation of liability for employees, not indemnification. Green Thumb argues that "[b]y limiting liability and not providing for indemnity, the District chose its remedies available to employees and denied employees of a non-profit corporation the right to indemnification for litigation in which they are involved." (Def.'s Mem. at 8.) The Court disagrees. Green Thumb is essentially asserting that indemnification statutes and limitation of liability statutes are the same. They are not. Indemnification statutes provide that if the employee is liable, the employer will pay any damages assessed. Limitation of liability statutes, in contrast, provide that if the employee is liable, the employee is only liable up to a certain amount. These statutes clearly have different results for the employee: One results in the employee owing nothing, and the other results in the employee perhaps owing thousands of dollars. The Court finds that the District of Columbia limitation of liability statute is not an indemnification statute for purposes of Minnesota Statute § 181.970, subd. (2)3. Therefore, Minnesota Statute § 181.970 applies to Green Thumb in this case and the Court denies Green Thumb's motion for summary judgment with respect to section 181.970.
IV. Good Faith
Section 181.970 requires an employer to indemnify an employee only if the employee "was not guilty of intentional misconduct, willful neglect of the duties of the employee's position, or bad faith." Minn. Stat. § 181.970, subd. 1(2). In its previous order, the Court found that "whether plaintiff acted in good faith, and whether she reasonably believed her conduct was in the best interest of the corporation are fact intensive questions that cannot be determined on this record." Carlsen v. Green Thumb, Inc., 2004 WL 234406, at *8 (D. Minn. Feb. 4, 2004). For the purposes of its current motion, Green Thumb put forth several affidavits regarding Carlsen's conduct and knowledge while an employee of Green Thumb in an attempt to bolster the factual record. These affidavits may in fact support Green Thumb's position, however, they do not remove any dispute as to whether Carlsen acted in good faith. As this dispute involves genuine issues of material fact, the Court denies Green Thumb's motion for summary judgment on this issue.
This case will be placed on the Court's next available trial calendar.
ORDER
Based on the submissions and the entire file and proceedings herein, IT IS HEREBY ORDERED that Defendant's Motion for Summary Judgment [Doc. No. 7] is GRANTED IN PART and DENIED IN PART as follows:
1. Defendant's motion is GRANTED with respect to Minnesota Statute § 317A.521.
2. Defendant's motion is DENIED with respect to Minnesota Statute § 181.970.