Opinion
Civil Action No. 3:03-CV-2788-N.
February 15, 2005
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant's Motion for Summary Judgment, filed August 25, 2004. Plaintiff Marie Kessell claims that Defendant Mega Life Health Insurance Co. violated an EEOC mediated settlement when it terminated her employment in January 2003. She alleges employment discrimination and common law torts arising out of that termination and the events covered by the settlement. Because the Court concludes that Kessell is not entitled to rescission of the settlement, and because her claims are otherwise unsupported by the summary judgment evidence so as to allow a reasonable jury to find in her favor, the Court grants the motion for summary judgment.
I. BACKGROUND
Plaintiff Marie Kessell ("Kessell") began working for Defendant Mega Life Health Insurance Co. ("Mega") in 1996. In 1998, Kessell was diagnosed with multiple sclerosis. Her condition worsened such that she began using a wheelchair in 2000. Around this time, Mega transferred or demoted her from her former position of "claims supervisor" to a new position as "claims administrative investigator." The change did not involve any decrease in salary. As early as September 2000, Kessell's doctors advised her to cease working due to her multiple sclerosis, but she continued to work against doctors' instructions and wishes because she felt capable of performing her job with disability accommodations from Mega.
On February 26, 2001, Kessell gave Mega a letter from her doctor stating that intervening doors hindered Kessell's ability to reach the restroom from her workstation. It further indicated that Kessell "loathes asking for help with this" and was therefore limiting her fluid intake, to the detriment of her health. Finally, it suggested that her work station be moved, or that "some of the intervening doors could be fitted with automatic open features." In response, Mega moved Kessell to a work station closer to the restroom and contacted its maintenance personnel to explore the possibility of modifying facilities. In the meantime, Mega instructed Kessell to ask coworkers for assistance in getting to the bathroom. Kessell indicated in an April 16, 2001 email that she was not receiving adequate accommodations and that "all I need is for someone to push me to the bathroom a few times a day." Mega told her in response that Mega was exploring the possibility of bathroom design modifications and that she should continue to ask for help from coworkers.
On May 15, 2001, Kessell submitted a letter of resignation, which indicated that she had ongoing difficulties finding coworkers to help her to the bathroom and to perform "footwork" tasks such as picking up faxes. On May 23, however, Kessell met with supervisors and a representative from Mega's human resources department to discuss accommodations that might allow her to remain employed. At the meeting, Kessell advised Mega that she wanted reliable assistance from coworkers rather than structural alterations to Mega's facilities. Mega agreed to assign employees to stop by her work station on a regular schedule to assist her with going to the restroom and performing job duties. All parties left the meeting with the expectation that Kessell would remain a Mega employee, and Mega subsequently assigned some of Kessell's coworkers to assist her. The next morning, however, the coworker assigned to take Kessell to the restroom at 9:00 a.m. did not arrive promptly. Kessell contacted this person and arranged to be taken to the restroom. Upon her return, at 9:06 a.m., Kessell sent an email confirming her resignation. She indicated in her deposition that she resigned because she concluded that "if you can't keep a promise for one day, then what chance do I have that you're going to in the future do it."
On June 6, 2001, Kessell filed a discrimination charge with the EEOC alleging that Mega forced her to resign by failing to accommodate her disability. In September 2001, Kessell and Mega participated in an EEOC sponsored mediation that resulted in a settlement of the charge (the "MSA"). In the MSA, Mega agreed to reinstate Kessell as a full-time employee with according benefits, although she would remain on an "indefinite personal leave of absence" rather than returning to work. Additionally, Mega agreed to provide Kessell with necessary forms for long term disability benefits, to distribute to Kessell and other employees "a memo . . . regarding entrances and exits for the building, for those employees with disabilities," and to "review and take action, where needed, regarding wheelchair access in its lunchroom facility." Kessell, for her part, agreed not to institute an ADA lawsuit based on her EEOC claim, and to submit a physician's report to Mega, substantiating any claims for short term or long term disability payments.
In accordance with the MSA, Mega reinstated Kessell and provided her with the benefits due to an employee on a leave of absence, significantly including health insurance but not salary. Additionally, Kessell qualified for long term disability payments through Mega's provider, based on a physician's report stating that she was permanently disabled. Kessell understood she would remain on leave of absence for the remainder of her life and would eventually receive retirement benefits. Mega later informed Kessell, however, that in accordance with company policy limiting leaves of absence to 18 months, she would be "administratively terminated" on January 31, 2003. Because of this termination, Kessell paid higher COBRA rates for her health insurance, which eventually terminated. Kessell still receives her long term disability payments.
Kessell brought the present suit in November 2003, alleging (1) retaliation and disability discrimination under the ADA and Texas Labor Code; (2) intentional infliction of emotional distress; and (3) "bad faith" in failing to reimburse medical expenses. Mega now moves for summary judgment on all claims.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate under Federal Rule of Civil Procedure 56 when the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits presented, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED.R.Civ.P.56(c), Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). A dispute about a material fact is "genuine" 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. 242, 248 (1986). The moving party must demonstrate the absence of any genuine issue of material fact, Celotex, 477 U.S. at 322-23, and the Court construes all evidence in favor of the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962), Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). The party moving for summary judgment must "demonstrate the absence of a genuine issue of material fact, but need not negate the elements of the nonmovant's case." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citation omitted).
III. MEGA IS ENTITLED TO SUMMARY JUDGMENT ON ALL CLAIMS A. To the Extent Kessell's ADA Claims Are Based on Conduct Prior to the MSA, They Are Barred by That AgreementThe Court must first consider whether Kessell's claims based on conduct prior to September 2001 are barred by the MSA. Kessell argues that she is not bound by the MSA because Mega breached it by, inter alia, terminating her in January 2003. The parties' focus on preclusion is curious, because the MSA does not appear to bar any claim stated in the present complaint. Nevertheless, the Court will decide whether Kessell is entitled to rescission of the MSA, because this issue has overarching significance for all claims in this case, and because the parties appear to agree that Kessell's ADA claims are partially based on events prior to the settlement.
This conclusion is based on two observations that neither party acknowledges. First, Kessell's complaint does not state a discrimination claim for any conduct prior to September 7, 2001. It contains a one paragraph fact section relating solely to Kessell's (then prospective) administrative termination on January 31, 2003, and asserts no further facts in connection with the discrimination claim. Second, despite Mega's repeated assertions that "Kessell promised not to pursue claims based on conduct occurring prior to [September 2001]," the MSA obligates her only "not to institute a lawsuit under the Americans with Disabilities Act, based on EEOC Charge Number 310A11978" (emphasis added). Mega presents no arguments or authority for construing the settlement to have a broader reach than this. Thus, it does not bar Kessell's common law claims.
The MSA provides in relevant part that:
1. . . . Charging Party, Marie Kessell, agrees not to institute a lawsuit under the Americans with Disabilities Act, based on EEOC Charge Number 310A11978.
. . . 7a. Marie Kessell, charging party, will be reinstated to her prior position, as a full-time employee, with all the benefits available to any other employee, through the natural course of employment. She is on an indefinite personal leave of absence. Date of reinstatement is May 30, 2001.
7b. Marie Kessell will obtain a medical report from her treating physician, within 30 days of this agreement, and submit it to Respondent, to substantiate any claims for Short Term Disability and Long Term Disability considerations.
7c. Respondent will supply Marie Kessell with the necessary forms to supply to her treating physician in order to apply for Long Term Disability, within 5 days of this agreement.
7d. By September 21, 2001, Respondent will distribute a memo to its employees regarding entrances and exits for the building, for those employees with disabilities. Marie Kessell will receive a copy of this memo.
7e. Respondent agrees to review and take action, where needed, regarding wheelchair access in its lunchroom facility. Kessell argues that she is entitled to rescission because Mega has breached its promises in paragraphs 7a, 7d, and 7e. In evaluating this argument, the Court construes the agreement according to the federal common law of contracts, which derives from general principles of contract. The Court concludes that Kessell is not entitled to rescission, for two reasons.
The parties do not discuss choice of law for interpretation of the MSA, relying instead on general contract principles. In fact, this is the correct approach. Federal common law controls a release of federal claims, including predetermination settlements of EEOC claims. Chaplin v. Nationscredit Corporation, 307 F.3d 368, 372 (5th Cir. 2002); Fulgence v. J. Ray McDermott Co., 662 F.2d 1207, 1209 (5th Cir. 1981); but see Riley v. American Family Mut. Ins. Co., 881 F.2d 368, 372 n. 8 (7th Cir. 1989) (noting minority of cases that apply state law). As applied in connection with federal statutes that deal with the employer-employee relationship, federal common law consists of general principles of contract, selected appropriately to effectuate federal employment policy. See Valle v. Johnson Controls World Servs., 957 F. Supp. 1404, 1423-24 (S.D. Miss. 1996).
1. Kessell Is Not Entitled to Rescission, Because She Has Not Tendered Consideration Received under the MSA
"A party cannot be permitted to retain the benefits received under a contract and at the same time escape the obligations imposed by the contract." Grillet v. Sears, Roebuck Co., 927 F.2d 217, 220 (5th Cir. 1991). Rather, a party seeking rescission must attempt to return the parties to the positions they held just before they entered into the agreement. Id. Accordingly, a person who signs a release, then sues her employer for matters covered under the release, is obligated to return the consideration at the outset of the case. Williams v. Phillips Petroleum Co., 23 F.3d 930, 937 (5th Cir. 1994); Accord Faris v. Williams WPC-I, Inc., 332 F.3d 316, 323 (5th Cir. 2003) (citing Phillips Petroleum). It is undisputed that a significant component of consideration in the MSA was that, by reinstating Kessell to her former position, Mega provided her with the opportunity to apply for long term disability benefits she would not have otherwise received. Kessell has received long term disability benefits since that time and continues to receive them. She has not offered to forgo or return these benefits, and she does not question Mega's characterization of her deposition testimony as indicating that she would be financially incapable of doing so. Kessell likewise has not offered to return the benefits, such as health insurance payments, that she received during the 18 month period after her reinstatement. Accordingly, Kessell has ratified the settlement. She may not escape her obligations under the settlement, including her obligation not to bring suit against Mega under the ADA in connection with the events surrounding her alleged constructive discharge from Mega in May, 2001.2. Kessell Is Not Entitled to Rescission, Because Mega Did Not Materially Breach the MSA
Even if Kessell were to return her consideration, she still would not be entitled to rescission. Under principles of general contract law, rescission — as opposed to damages or specific performance — is available only to a party whose counterpart has committed a material breach. Hernandez v. Gulf Group Lloyd's, 875 S.W.2d 691, 693 (Tex. 1994) (citing RESTATMENT (SECOND) OF CONTRACTS § 241(a) (1981)). Mega has not done so.
Mega's alleged breaches of paragraphs 7d and 7e are not material. In determining the materiality of a breach, courts consider the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance. "The less the nonbreaching party is deprived of the expected benefit, the less material the breach." 875 S.W.2d at 693. Other relevant factors include the extent to which the injured party can be otherwise compensated for the breach, the likelihood that the failure can be cured, and the existence of bad faith. Id. at 693 n. 2.
The alleged breaches of paragraphs 7d and 7e did not harm Kessell in any tangible way, because they concerned commitments to make further disability accommodations at a workplace to which Kessell never returned. Furthermore, although Kessell could be expected to receive psychological benefit from knowing that Mega fixed problems that had disturbed her, her complaint, declaration, and deposition do not evince a great deal of concern for such benefits. Kessell does not seek specific performance of Mega's commitments under paragraphs 7d and 7e, and does not seek damages for their alleged breach. Indeed, she does not demonstrate any concern at all over these provisions except as a ground for escaping her own commitments. Based on the pleadings, briefs, and summary judgment evidence, the Court concludes that Mega's commitments under paragraphs 7d and 7e are not a significant part of the MSA's "expected benefit" to Kessell. Accordingly, Mega's alleged breach of paragraphs 7d and 7e does not excuse Kessell from the terms of the MSA.
Mega did not breach paragraph 7a of the MSA. The disputed language provides that:
7a. Marie Kessell, charging party, will be reinstated to her prior position, as a full-time employee, with all the benefits available to any other employee, through the natural course of employment. She is on an indefinite personal leave of absence. Date of reinstatement is May 30, 2001.
Kessell argues that Mega violated her contractual right to an "indefinite personal leave of absence" by terminating her after 18 months pursuant to its company policy limiting leaves of absence to that length of time. In order to maintain this reading of the contract, she must convince the Court that (1) the word "indefinite" means "permanent," and (2) the sentence in which it appears governs the duration and extent of her entitlement to employment and benefits. Based on the plain meaning of the MSA, the Court disagrees with both interpretations.
As Kessell indicates in her brief, the most common meanings for "indefinite" are "having no exact limits," "not a certain period of time," and "not limiting or specifying time." Rather than specifying how long Kessell shall take a leave of absence — for example, "three months" or "permanently" — the sentence explicitly does not specify the length of the leave. It merely indicates that she need not return to work on the date of her reinstatement. A different clause in the MSA governs the duration and extent of Kessell's entitlement to leave, health insurance, retirement benefits, and other "benefits available to any other employee." Kessell is entitled to these benefits in accordance with "the natural course of employment."
Looking to the text of the MSA, the Court sees two possible interpretations for "natural course of employment." First, it could mean the course of employment Kessell could be expected to enjoy in the absence of multiple sclerosis. This is consistent with Kessell's interpretation of the settlement, because it would entitle her to, inter alia, the lifetime health benefits and retirement benefits she now claims as her right. Second, the natural course of employment could merely mean the course of employment Kessell would have enjoyed had she taken (and been granted) a personal leave of absence in May 2001 rather than resigning. This is consistent with Mega's interpretation of the settlement as reinstating Kessell primarily for the purpose of allowing her to acquire long term disability benefits along with other short term benefits. Each of these interpretations is reconcilable with the plain meaning of the phrase "natural course of employment" and each makes sense in the context of this case.
Because the text of the MSA does not point to a clear meaning, the Court may consider extrinsic evidence of the parties' intent. See 11 WILLISTON, CONTRACTS § 32:14 (4th ed. 2000). Here, the parties' subsequent conduct shows that Mega's construction is correct. If "natural course of employment" meant the course of employment Kessell would enjoy but for her disability, then she would continue receiving a salary until she reached a "natural" retirement age, and thereafter would receive retirement benefits. Yet it is undisputed that she did not receive and did not expect to receive a salary at any time subsequent to the settlement. Kessell's deposition testimony indicates that she recognized this as a natural consequence — under principles of general applicability to Mega employees — of taking a leave of absence rather than returning to work. Thus, the parties' course of conduct indicates that they did not interpret the MSA to exempt Kessell from the ordinary consequences of taking a leave of absence. Rather, she would be treated like any other employee who took a leave of absence beginning in May 2001. Just like loss of salary, administrative termination after 18 months is an ordinary consequence, applicable to any other employee, of taking a leave of absence from Mega.
Accordingly, Mega did not breach the MSA by terminating Kessell after 18 months. Because Mega did not materially breach the settlement, Kessell remains bound by it. To the extent that her ADA claims are based on conduct prior to September 7, 2001, they are therefore barred and subject to summary judgment.
B. Kessell's State and Federal Claims Based on Her Administrative Termination Are Subject to Summary Judgment
Kessell's complaint states that she "believes she was terminated because she had filed a previous [EEOC charge] and because she has a disability that required special consideration from her employer." To the degree that this assertion forms the basis of her state and federal discrimination claims, those claims are subject to summary judgment.
Kessell's federal and state discrimination claims are governed by the framework set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-03 (1973). Because Kessell does not present direct evidence of discrimination, she has the initial burden to establish a prima facie case by showing that (1) she suffered from a disability; (2) she was qualified for her job; (3) she experienced an adverse employment action; and (4) Mega replaced her with a nondisabled person or treated her less favorably than nondisabled employees. Daigle v. Liberty Life Insurance Co., 70 F.3d 394, 396 (5th Cir. 1996); Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003). If she establishes a prima facie case, then the burden shifts to Mega to show a legitimate nondiscriminatory reason for its adverse action. 70 F.3d at 396. If Mega does so, then Kessell carries the burden of persuasion to establish, as a matter of fact, that Mega fired her based on discriminatory intent. Id.
The Texas legislature intended to correlate state law with federal law when it enacted the Texas Labor Code provisions that govern disability discrimination. See TEX. LAB. CODE § 21.001; M.D. Anderson Hospital and Tumor Institute, 28 S.W.3d 22, 24 (Tex. 2000). Texas courts accordingly look to federal law in interpreting these provisions. 28 S.W.3d at 24.
Kessell has not established a prima facie case of disability discrimination based on her administrative termination, for two reasons. First, she was not qualified to perform the duties of her job. At the time Kessell was terminated, she had not worked in 18 months. Moreover, she was receiving Mega long term disability benefits and Social Security disability benefits, each of which requires certification of physical inability to perform one's job. Second, Kessell presents not a scintilla of evidence that she was treated less favorably than any nondisabled employee. In her deposition, Kessell could provide no support for the claim that her termination was motivated by something other than neutral administrative policy, and could cite no evidence that the policy had been applied differently to other employees.
In addition, Mega's general policy of terminating employees after 18 months of leave constitutes a legitimate, nondiscriminatory reason for terminating Kessell. Kessell offers no evidence that anything other than this policy motivated her termination. Her sole argument is that Mega violated the MSA by terminating her, and that the Court should therefore infer discriminatory and retaliatory intent. The Court has determined that Mega did not violate the MSA, and Kessell presents no other evidence to support an inference of discriminatory intent.
Kessell's retaliation claim is governed by a similar framework, and it fails as well. Under the ADA and Texas Labor Code, Kessell has the burden to establish a prima facie case by showing that (1) she engaged in a protected activity; (2) she experienced an adverse employment action; (3) the protected act and the adverse action were causally connected. Seaman v. CSPH, Inc., 179 F.2d 297, 302 (5th Cir. 1999); Marsaglia v. Univ. of Texas, El Paso, 22 S.W.3d 1, 4 (Tex.App.-El Paso, 1999, pet. denied); La Tier v. Compaq Computer Corp., 123 S.W.3d 557, 562 (Tex.App.-San Antonio, 2003, no pet.). This shifts the burden to Mega to show a legitimate, nondiscriminatory reason for the adverse employment action. 179 F.2d at 302. Upon such a showing, it is Kessell's burden to prove, as a matter of fact, that the proffered reason is a pretext for retaliation. Id. Ultimately this entails showing that "but for" the protected activity, the adverse employment action would not have occurred. Id.
Kessell has not established a prima facie case of retaliation, because there is no evidence of a causal nexus between her EEOC claim and her termination. In particular, there is "no evidence that anyone involved in her termination had actual knowledge of [her EEOC] claim." Cf. Parham v. Carrier Corp., 9 F.3d 383, 387 (5th Cir. 1993) (finding no evidence of causal connection between workers compensation claim and termination pursuant to 24 month limit on leaves of absence).
Even if there were such evidence, Mega's administrative policy constitutes a legitimate, nondiscriminatory reason for terminating Kessell after 18 months of leave. Kessell offers no evidence that Mega enforced this policy against her as a pretext for retaliation, or that Mega would have allowed her to take a leave of absence longer than 18 months had she not filed the EEOC complaint. "Uniform enforcement of a reasonable absence-control provision . . . does not constitute retaliatory discharge." Carrozza, 876 S.W.2d at 313. Accordingly, Mega is entitled to summary judgment on Kessell's retaliation and discrimination claims related to her administrative termination.
C. Mega Is Entitled to Summary Judgment on Kessell's Claim for Intentional Infliction of Emotional Distress
To recover for intentional infliction of emotional distress under Texas law, a plaintiff must prove that (1) the defendant acted intentionally or recklessly; (2) the conduct was extreme and outrageous; (3) the actions of the defendant caused the plaintiff emotional distress; (4) the resulting emotional distress was severe. GTE v. Bruce, 998 S.W.2d 605, 616 (Tex. 1999). Without expressing any conclusion with respect to the other elements, the Court concludes that there is no basis in the summary judgment evidence for Kessell's claim that Mega engaged in extreme and outrageous conduct.In order to be extreme and outrageous, conduct must be:
so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, insensitive or even rude behavior does not constitute extreme and outrageous conduct. Similarly, mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities do not rise to the level of extreme and outrageous conduct.Id. at 611-612. Relative to courts in some other states, Texas courts are reluctant to categorize workplace behavior as extreme and outrageous. Id. at 612. A claim for intentional infliction of emotional distress does not lie for "ordinary employment disputes," and it is very rare that conduct in the employment context is so egregious as to elevate it out of this category and into the realm of the extreme and outrageous. Id. at 613.
The present case is manifestly an ordinary employment dispute. The summary judgment evidence demonstrates at most that Kessell made requests for accommodations and that Mega sluggishly or incompletely fulfilled these requests. In this regard, the case is no different from scores of similar cases filed under the ADA. Similarly, Kessell's claim that Mega terminated her employment and in particular her health insurance in violation of her contractual rights is by no means out of the ordinary. Employers and employees frequently disagree on such matters, and Kessell has presented no evidence that anyone at Mega negotiated the settlement in bad faith, applied the administrative termination policy inconsistently, or intended for her to suffer any harm beyond that inherent in the loss of the disputed benefits. Accordingly, no reasonable jury could find for Kessell on this claim, and Mega is entitled to summary judgment.
D. Mega Is Entitled to Summary Judgment on Kessell's Bad Faith Claim
Kessell's bad faith claim is legally and factually baseless. Numerous cases hold that no cause of action exists under Texas law for bad faith dealings in the employment context. E.g. City of Midland v. O'Bryant, 18 S.W.3d 209, 216 (Tex. 2000) (declining to impose a duty of good faith and fair dealing on employers in light of existing statutory scheme governing the employment relationship). Kessell cites no authority in support of her contention that such an action exists.
Moreover, in her deposition, Kessell professed ignorance as to the factual basis of this claim. The Complaint states that "Defendant in bad faith denied Plaintiff's medical expenses in violation of the agreement to provide medical coverage. Plaintiff submitted reimbursement forms for doctors visits and medication as required. Each request was denied. Plaintiffs seeks all damages for medical expenses which were not reimbursed as required." Kessell, however, was unable to give an example of a reimbursement request that Mega had denied. When the bad faith section of her complaint was read to her, Kessell stated that she was "not sure" as to the factual basis of the claim, and that the only nonpayment of medical benefits she was aware of was that associated with the then prospective loss of her health insurance. Kessell changes her story again in her response to the present motion, stating that the basis of this claim is alleged bad faith related to the MSA and her January 2003 termination. This is not the claim she pled. The bad faith claim in the complaint, in addition to being legally baseless, is not supported by any summary judgment evidence. Accordingly, Mega is entitled to summary judgment on this claim.
V. CONCLUSION
The Court rejects Kessell's claim that Mega has breached the MSA, and that she is entitled to rescission of that agreement. Her ADA claims, to the extent they are based on conduct covered under the MSA, are barred. Moreover, as Kessell presents no evidence of retaliation or discrimination in connection with her January 31, 2003 termination, other than her claim that it constituted a breach of the MSA, her employment discrimination claims based on the termination are factually baseless such that no reasonable jury could find in her favor on those claims. Kessell's claim for intentional infliction of emotional distress similarly fails, because she alleges no conduct on Mega's part that a jury could reasonably find to be "extreme and outrageous." Finally, Kessell's claim for "bad faith" is both legally and factually baseless. Accordingly, no issues of material fact remain, and Mega is entitled to judgment as a matter of law on all claims. It is so ordered.