Opinion
No. 1:02-cv-271
March 3, 2004
MEMORANDUM
I. Introduction
Plaintiff Taylor J. McDonald filed his complaint on September 10, 2003 [Court File No. 1]. He brought this action against U.S. Xpress, Inc. ("USXP"). He alleges that (1) USXP wrongfully terminated him to avoid his receipt of health benefits in violation of § 510 of the Employee Retirement Income Security Act ("ERISA") and (2) in violation of Tennessee common law USXP fraudulently induced him to accept its offer of employment based upon a verbal representation promising health benefits [Court File No. 1].
On January 14, 2002, USXP filed a motion for a summary judgment [Court File No. 9]. Plaintiff filed his response to USXP's summary judgment motion on February 11, 2002 [Court File No. 14].
USXP's motion for a summary judgment is now ripe for review. [Court File No. 19].
II. Background
Plaintiff Taylor McDonald was employed, by a contracting company, as a contract employee at USXP from October 2000 through January 29, 2001. On January 29, 2001, he began working as a permanent, full-time employee for USXP. He was terminated by USXP on September 25, 2001.
Plaintiff McDonald was a Senior Programmer whose experience was primarily in Microsoft ® web-based programming. He was employed in USXP's IT, information technology, department. Jeff Atchley was plaintiff's immediate superior. Atchley reported to Michael Hatfield. During his employment with USXP, plaintiff worked essentially on a single project, Xpress Recruiter.
On January 29, 2001, plaintiff, along with other new employees at USXP, attended a full-day orientation. During that orientation, plaintiff was given insurance forms to complete and return prior to March 1, 2001. The Human Resources ("HR") Department of USXP presented a PowerPoint program at the orientation which indicated that the insurance forms must be completed and submitted within thirty days of the orientation. McDonald was given an employee handbook which indicated the same. If a new employee failed to turn in insurance forms within 30 days of his or her hire, the employee would be unable to participate in USXP's health insurance plan until the next health insurance open season, which began on October 1, 2001.
Plaintiff did not turn in his application forms for health insurance benefits prior to March 1, 2001. He admits he left the orientation, returned to his home in Huntsville, Alabama, and put the application forms in a desk drawer.
McDonald asserts he attempted to turn in the insurance forms at the end of the orientation meeting prior to the time he left to return to Huntsville. He alleges that Penny Murray, the HR employee who presented the orientation program, declined to take the forms. He stated she acted like it was "no big deal" as to when he turned the forms in.
Plaintiff did not communicate with USXP concerning his health insurance until some time after March 1, 2001. At that time, plaintiff called his immediate supervisor, Jeff Atchley, inquiring about his group health insurance. Atchley told plaintiff to telephone the HR Department at USXP, where plaintiff was told he had missed the 30-day deadline for completing and submitting the insurance forms. Thereafter, plaintiff began to complain to Atchley that he had not known about the 30-day deadline for submitting his completed health insurance forms and he asked Atchley if USXP could help him obtain health insurance.
Jeff Atchley spoke with his superior, Michael Hatfield. Together Hatfield and Atchley attempted to come up with alternative methods to provide health insurance to plaintiff McDonald. One of the alternatives suggested was that McDonald obtain private insurance for the period between March and October 1, 2001, and USXP would raise his pay to cover the cost of the private insurance. However, USXP's HR department rejected the alternatives suggested by Hatfield and/or Atchley, stating that no exception could be made for an employee who had missed the 30-day deadline for submitting forms and that plaintiff would be eligible to apply for health insurance benefits during the next open enrollment window in October 2001.
During his employment with USXP, plaintiff did not work on-site at USXP's facilities in Chattanooga, Tennessee. Rather, USXP permitted plaintiff to work full-time from his home in Huntsville, Alabama.
According to Jeff Atchley, there were a series of problems with the quality and quantity of plaintiff's work; and Atchley had various meeting and correspondence with plaintiff to talk about his work. In the immediate aftermath of the September 11, 2001 terrorist attacks, USXP alleges it faced a declining economy in the trucking industry and it encouraged Hatfield to make an effort in the IT department to cut their lowest-performing employees. In his January 7, 2004 deposition, Atchley testified that after evaluating employees, he felt that McDonald was a lower-performing employee. Atchley conferred with Hatfield, who agreed with Atchley and even believed that McDonald would have been terminated regardless of USXP's post-September 11 directive to reduce the number of employees in the IT department.
McDonald alleges that USXP terminated him in September 2001 to avoid having him or his family on the group health insurance policy. He asserts that the catalyst for his termination was his insistence on the health insurance benefits and that his termination was due to an effort to avoid paying the group health benefits due him. He further alleges he accepted the offer of employment at USXP solely because of health insurance needs and claims that USXP is liable for his damages for "giving up his valuable and secure employment" at the contractor. In their January 7, 2004 depositions, Atchley and Hatfield admit talking with plaintiff about USXP's health insurance benefits. They further admit telling plaintiff that health insurance was offered to all employees at USXP and that he would be given an opportunity to participate in such coverage.
Hatfield, who made the ultimate decision to terminate plaintiff, testified that he did not know then, nor did he know at the time of his January 7, 2004 deposition, how much it would have cost USXP in claim dollars if plaintiff and his family were enrolled in the group health policy. Hatfield further testified that he never attended any meetings nor did he ever have a discussion with any supervisors or managers at USXP concerning the necessity to reduce the company's health-care costs.
III. Motion for Summary Judgment [Court File No. 9]
USXP moves for a summary judgment on the ground that there is no genuine issue of material fact which creates a cause of action in this matter [Court File No. 10]. More specifically, USXP asserts that plaintiff's allegations that he was wrongfully terminated in violation of § 510 of ERISA, 29 U.S.C. § 1140, because USXP sought to avoid providing him with medical benefits do not state a claim recognized under ERISA. [Court File No. 10, pp. 6-10]. USXP further asserts that plaintiff's state law claims of fraudulent inducement should be dismissed because he has submitted insufficient evidence to allow such claim(s) to go to a jury. Id. at 10-12.
In his response to defendant's motion for a summary judgment [Court File No. 14], plaintiff asserts he has stated a cause of action under ERISA. [Court File No. 14, pp. 8-10]. More specifically, he asserts that the evidence establishes both a prima facie case under 29 U.S.C. § 1140 and also establishes that the legitimate, non-discriminatory reason(s) advanced by USXP for plaintiff's termination was pretextual. Id. at 8-13. Finally, plaintiff asserts he has submitted sufficient evidence to permit his state law claim of fraudulent inducement to go to a jury because there was substantial evidence that USXP never intended that he receive the promised insurance benefits. Id. at 13-14.
A. Standard of Review
Summary judgment is appropriate where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FED. R. Civ. P. 56(c). In ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); National Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To refute such a showing, the non-moving party must present some significant, probative evidence indicating the necessity of a trial for resolving a material, factual dispute. Celotex Corp., 477 U.S. at 322. A mere scintilla of evidence is not enough. Anderson, 477 U.S. at 252; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). The Court's role is limited to determining whether the case contains sufficient evidence from which a jury could reasonably find for the non-moving party. Anderson, 477 U.S. at 248, 249; National Satellite Sports, 253 F.3d at 907.
B. Plaintiff's claims under ERISA.
Defendant seeks a summary judgment on plaintiff's claim that it wrongfully terminated him to avoid the payment of medical benefits under § 510 of ERISA, 29 U.S.C. § 1140. [Court File No. 9].
Section 510 of ERISA, 29 U.S.C. § 1140 states in pertinent part:
It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [ 29 U.S.C.A. § 301, et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter . . .
Title 29 U.S.C. § 1140.
In order to state a claim under § 510 of ERISA, a "plaintiff `must show that [his] employer had a specific intent to violate ERISA.'" Smith v. Ameritech, 129 F.3d 857, 865 (6th Cir. 1997) (quoting Humphreys v. Bellaire Corp., 966 F.2d 1037, 1043 (6th Cir. 1992) (quoting Rush v. United Techs., Otis Elevator Div., 930 F.2d 453, 457 (6th Cir. 1991)). However, because generally there is no direct evidence of an employer's motivation, most courts employ a Burdine burden shifting approach in a § 510 case. Humphreys, 966 F.2d at 1043 (citing Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981); Conkright v. Westinghouse Elec. Corp. 933 F.2d 231, 239 (4th Cir. 1991); Dister v. Continental Group, Inc., 859 F.2d 1108, 1112 (2d Cir. 1988); Gavalik v. Continental Can Co., 812 F.2d 834, 852 (3rd Cir.), cert. denied, 484 U.S. 979, 108 S.Ct. 495, 98 E.Ed.2d 492 (1987)).
In order to prove a prima facie case under § 510 a plaintiff must show that there was: "`(1) prohibited employer conduct (2) taken for the purpose of interfering (3) with the attainment of any right to which the employee may become entitled.'" Humphreys, 966 F.2d at 1043 (quoting Gavalik, 812 F.2d at 852). In order to show a discharge which violated 29 U.S.C. § 1140
a plaintiff "must show that an employer had a specific intent to violate ERISA." Rush v. United Technologies, Otis Elevator Div., 930 F.2d 453, 457 (6th Cir. 1991). The plaintiff is not required to show that the employer's sole purpose in discharging him was to interfere with his pension benefits, but rather it was a "motivating factor" in the decision.Id. (citing Meredith v. Navistar Int'l Transp. Corp., 935 F.2d 124, 127 (7th Cir. 1991)).
If the plaintiff establishes a prima facie case under § 510, the employer can rebut the presumption of impermissible action created by the prima facie case by introducing "`evidence of a legitimate, nondiscriminatory reason for its challenged action.'" Smith v. Ameritech, 129 F.3d 857, 865 (6th Cir. 1997) (citing Humphreys, 966 F.2d at 1043). Once the employee has satisfied its burden of production by introducing evidence of a legitimate, nondiscriminatory reason for its action, the burden then shifts back to the plaintiff to show that the employee's proffered reason was mere pretext for purposeful interference with the plaintiff's ERISA rights. Id. In establishing pretext, the plaintiff is not required to show that the employee's sole purpose was to interfere with plaintiff's entitlement to ERISA benefits. Smith, 129 F.3d at 865 (citing Shahid v. Ford Motor Co., 76 F.3d 1404, 1411 (6th Cir. 1996)). Rather, the employee must "`either prove that the interference was a motivating factor in the employer's actions or prove that [the] employer's proffered reason is unworthy of credence.'" Smith, 129 F.3d at 865 (quoting Shahid, 76 F.3d at 1411) (quoting Humphreys, 966 F.2d at 1043). Finally, despite the shifting burdens of production, the plaintiff retains the burden of persuasion throughout the action on the ultimate issue; namely, that he has been the victim of purposeful interference with his ERISA rights. Furcini v. Equibank, NA, 660 F. Supp. 1436, 1440 (W.D. Pa. 1987) (citing Burdine, 450 U.S. at 256, 101 S.Ct. at 1095).
Having reviewed the evidence submitted by the parties in connection with defendant's motion for a summary judgment, the Court finds that plaintiff has established a prima facie case pursuant to § 510 of ERISA. The undisputed evidence shows that plaintiff was hired by USXP on January 29, 2001. It is equally undisputed by the parties that the offer of employment made by USXP to defendant did include the opportunity to participate in one of the health insurance plans offered by USXP to its employees. The record includes an offer of employment from USXP to defendant. [Court File No. 14, Exhibit A]. The offer of employment is dated January 8, 2001. Plaintiff signed the letter on January 9, 2001, indicating that he agreed "to accept the position as described in this letter." Id. at p. 2.
The January 8, 2001 offer of employment states in pertinent part:
We are pleased to offer you a position as a Senior Programmer Analyst in our I. T. Department at our home office in Chattanooga. . . .
. . . Your shift schedule will be Monday — Friday from 8:00 a.m.-5:00 p.m. and you will report directly to Jeff Atchley.
U.S. Xpress currently offers all employees the opportunity to participate in its Section 125 Cafeteria Plan and subsidizes the majority of the cost of the employee's major medical insurance. Through the Cafeteria Plan, employees have the choice of three major medical plans, all of which are PPO plans through BlueCross BuleShield [sic], with differing deductibles and co-payments. Premiums start at $10.95 per week for employee coverage, $21.90 per week for coverage for the employee plus one dependent, and $43.80 per week for coverage for the employee plus two or more dependents. Employees may then buy more comprehensive coverage at higher rates, and all premiums are payroll-deducted on a pre-tax basis.Id.
It is equally undisputed between the parties that on January 29, 2001, plaintiff attended an orientation session conducted by Penny Murray of USXP's HR Department. At that orientation session, plaintiff was given the necessary forms to enroll in the medical plans offered by USXP. It is likewise undisputed between the parties that plaintiff had thirty days or until March 1, 2001, to turn the forms in to USXP's HR Department and that if the forms were not turned in by March 1, 2001, plaintiff could not enroll in one of the health insurance plans offered by USXP until the next open enrollment period, which began in October 2001. Finally, it is undisputed between the parties that plaintiff did not actually turn in the health insurance enrollment forms on or before March 1, 2001. Once that event happened, plaintiff would not be eligible to enroll in one of USXP's health insurance plans until the October 2001 open season.
Plaintiff makes certain allegations, including that he tried to turn in the enrollment forms on January 29, 2001, but that Penny Murray would not take them. These allegations are not discussed here because they are not relevant to the issue of whether or not plaintiff established a prima facie case under § 501 of ERISA. To they extent that these allegations are relevant to other issues, such as whether the legitimate, nondiscriminatory reason advanced by USXP was pretextual, these issues will be discussed elsewhere in this memorandum.
Plaintiff was discharged by USXP on September 25, 2001. [Court File No. 14, Exhibit H]. Thus, plaintiff was discharged approximately five days before the October 2001 enrollment period was to begin.
Moreover, plaintiff supervisors were aware that health insurance benefits were important to him and that he was certain to enroll in one of the health insurance plans offered by USXP once the open enrollment period began. During his January 7, 2004 deposition, Michael Hatfield testified that in early March 2001, he was approached by Jeff Atchley who informed him that plaintiff had failed to turn in the enrollment forms for health insurance. [Court File No. 14, Hatfield, dep'n, p. 23]. Hatfield testified that he and Jeff Atchley discussed options for allowing plaintiff to obtain health insurance. Id. at 24. Either Hatfield or Atchley discussed those options with USXP's HR Department, but they were not approved. Id. at 24-29. Mr. Hatfield testified that he was frustrated by the inability to work out an option which would allow plaintiff to obtain health insurance prior to the October 2001 open enrollment period. He stated:
I didn't feel like we had an obligation to provide [plaintiff] or any other employee with insurance. My frustration was in the fact that although he had missed the 30 day cutoff he was still wanting insurance and I had an employee that wanted insurance that didn't have insurance . . .Id. at 30.
In Humphreys v. Bellaire Corp., 966 F.2d 1037 (6th Cir. 1992), the plaintiff was discharged by his employer in early April, 1987. Id. at 1039. Subsequently, plaintiff brought an action asserting, inter alia, that he was terminated in violation of § 510 of ERISA, 29 U.S.C. § 1140. With regard to his ERISA discharge claim, the Humphreys court found that Humphreys had:
met his burden of presenting evidence to support each of the elements of a prima facie case. He was discharged, and it was his testimony that his pension would have vested in two months and that this would have cost the company a substantial amount. Although it is no more than the bare minimum that a plaintiff must show to meet the prima facie case threshold, in this case it satisfies that low threshold because, examining only Humphrey's evidence, the proximity of vesting provides at least some inference of intentional, prohibited activity.Id. at 1043-44. See also Almond v. ABB Indus. Systems, Inc., No. C2-95-707, 2001 WL 242548 at *15 (S.D. Ohio Mar. 6, 2001), aff'd, 56 Fed. Appx. 672, 2003 WL 173640 (6th Cir. Jan. 22, 2003).
In this action, as in Humphreys, because the plaintiff was terminated within approximately one week of the time when he would have been eligible to enroll in one of the health insurance plans offered by USXP, the Court finds that he has adduced the bare minimum amount of evidence to meet the threshold of a prima facie case under § 510 of ERISA. Hence, under the Burdine shifting approach, the issue now becomes whether USXP has introduced evidence of a legitimate, non-discriminatory reason for its action.
Having reviewed the pleadings, the Court finds that USXP has introduced evidence of a legitimate, non-discriminatory reason for plaintiffs termination on September 25, 2001. During his January 7, 2004, deposition, Jeff Atchley testified that plaintiff was terminated "[b]ecause we were having performance issues both with the amount of work he was producing and the quality of work he was producing." [Court File No. 9, Exhibit A, p. 24]. Mr. Atchley further testified that plaintiff was terminated in late September 2001 because
[a]t the time if you remember obviously the economy at that time was not good and then we had September 11th happen and the — it was pretty well known that the economy was going to take a severe downturn at that time and we were encouraged by management to cut our lowest performing employees to cut costs.Id. Mr. Atchley testified he received the management directive to cut costs by eliminating the lowest performing employee from Michael Hatfield. Id. Mr. Atchley further testified that he personally did not terminate any employees whom he supervised other than plaintiff. Id. However, he stated that USXP terminated somewhere between three to five employees for poor performance at or about the time of plaintiff's termination. Id. at 25. He stated that these individuals were several other employees in USXP's IT Department and several contractors. Id.
During his deposition, Mr. Atchley was also asked about several "IMS" — instant message counseling sessions he had with plaintiff.
Q. Okay. As you sit here right now without even reviewing again the IMS through June and July, did anything stand out in your mind as you reviewed the IMS that you were referring to as session — instant message counseling sessions?
R. We had one instance that really — that stood out and I don't remember the date on it of me expressing to Taylor my — about being very frustrated and to my mind that's — that would count as, you know, letting him know, hey, there's a problem here.
Q. Did you tell him that you were frustrated with him?
R. I can't remember definitively, but that was my intent.Id. at 47-48.
Mr. Atchley further testified that he had concerns about the quantity of work plaintiff was producing. [Court File No. 14, Atchley dep'n, p. 34]. He stated the "amount of work that [plaintiff] was producing for someone of his level was insufficient in my mind." Id. at 34.
During the deposition, Mr. Atchley was asked to review the IM communications between plaintiff and himself. Id. at 41-42. He stated that on August 22, he had an instant message session with plaintiff which was "a result of . . . some things not being properly tested and I was having to remind him to test things thoroughly." Id. at 43.
The deposition of Michael Hatfield was also taken on January 7, 2004. During the deposition, Mr. Hatfield was asked about the decision to terminate plaintiff. He testified:
No, he was — he was not — in my opinion he was not a C employee. He was a D employee . . .
My contention is whether we had been asked to cut back on people at that time or not, in my opinion he would have been let go for performance.
[Court File No. 9, Exhibit B, p. 50].
Mr. Hatfield further testified that USXP was self-insured and that the premiums for participating in USXP's health insurance plan were the same regardless of an individual's medical health condition or situation. Id. at 54. Mr. Hatfield also stated that in September 2001, he had no idea how much it would cost USXP if plaintiff, his wife and their two boys had been insured under USXP's group health policy. Id.
In addition, Mr. Hatfield testified that in September 2001, he was unaware that plaintiff's wife had diabetes; and even if he were aware that Mrs. McDonald had diabetes in September 2001, he was unaware how much it would cost USXP to pay her medical claims if she became insured under the company's health plan. Id. at 55. Finally, Mr. Hatfield testified that he never attended any meeting at USXP where the necessity of keeping down the company's health care costs was discussed and he stated he never had a conversation on that topic with anyone in a supervisory or management position at USXP. Id. at 55-56.
Further, Mr. Hatfield testified that sometime in early to mid-March, Jeff Atchley approached him to tell him that plaintiff had not turned his insurance forms in. Id. at 23. Mr. Hatfield stated that he had never before encountered that situation. Id. at 24. Mr. Hatfield and Jeff Atchley had a discussion about what options they had under the situation. Id. at 24-29.
Mr. Hatfield stated that he had continuing discussions with Jeff Atchley about plaintiff's insurance situation. Id. at 29. Mr. Hatfield stated that Mr. Atchley consistently relayed plaintiff's concerns about the insurance situation to him. Id. at 52. Mr. Hatfield testified, however, that sometime in late April or early May, Jeff Atchley stopped approaching him about plaintiff's insurance concerns and that such communications between himself and Atchley stopped entirely up through the time of plaintiff's termination. Id. at 52.
The record also contains a document dated September 25, 2001, which is entitled "Notice to Employee as to Change in Relationship." [Court File No. 14, Exhibit H]. The notice is addressed to plaintiff, it states that plaintiff was being discharged as of September 25, 2001, for poor performance. Id. Plaintiff signed the notice on September 25, 2001, acknowledging that he did receive a copy of the notice on that date. Id.
The record also contains a document marked strictly confidential. [Court File No. 14, Exhibit G]. The document is titled:
Taylor McDonald 2001 Jeff Atchley
Id. In extremely small print the document states: "Note: This form should be used to keep track of both positive and negative actions by the employee to aid in the appraisal process." Id.
There are three entries on the document and each entry is divided into three columns. The first entry is for May 1, 2001. The first column of that entry states: "General productivity, quality and decision-making issues related to the Xpress Recruiter project." Id. The next column states: "Verbal counseling session at USXP. Taylor and Jeff Atchley were in attendance." The third column states: "Taylor acknowledged the discussion and agreed to some but not all of the issues discussed by Jeff." Id.
The second entry is for June 1, 2001. The first column of that entry states: "Quality assurance/testing issues regarding Xpress Recruiter project. Id. The next column states: "Instant message session/counseling concerning issues." Id. The third column of that entry states: "Taylor acknowledged the issues. Neither agreed or strongly disagreed." Id.
The third entry is for July 1, 2001. The first column of that entry states: "Proper testing/quality assurance issues concerning Xpress Recruiter project." Id. The next column states: "Instant message session/counseling concerning issues." Id. The third column states: "Taylor acknowledged the issues raised." Id.
Accordingly, the Court finds that defendant, USXP, has produced evidence of a legitimate, nondiscriminatory reason for the termination of plaintiff on September 25, 2001. The evidence adduced by USXP shows that it was dissatisfied with plaintiff's job performance and at the same time was reducing its workforce by eliminating lower performing employees.
As USXP has advanced a legitimate, nondiscriminatory reason for plaintiff's termination, under the Burdine analysis, plaintiff must establish that USXP's legitimate, nondiscriminatory reason was pretextual. The Court has reviewed the evidence of record and finds that except for the close proximity of plaintiff's termination to the beginning of the open enrollment period for health insurance, plaintiff has presented no additional evidence of pretext. Moreover, although plaintiff was terminated within one week of the open enrollment period for health benefits, as the court in Almond stated:
Even if the Court were to find that [plaintiff's] termination was in "close proximity" to the vesting of his benefits, this would not necessarily make summary judgment inappropriate. In Humphreys, the Court noted that, "[w]hile we acknowledge[d] . . . that proximity to vesting may provide enough to support the existence of a prima facie case, once the employer has presented a separate, legitimate reason for the discharge, we do not believe that [monetary] savings and proximity will always be enough to entitle plaintiff to a trial on this type of claim.Almond, 2001 WL 242548 at * 15 (quoting Humphreys, 966 F.2d at 1044).
Apart from the evidence of proximity, this action is lacking any evidence from which a reasonable juror could find that the legitimate, nondiscriminatory reason for plaintiff's termination was pretextual. First, plaintiff insists that the basis for his termination was his insistence in receiving the promised health insurance and that his termination was based in substantial part to avoid payment of the group health insurance benefit due him.
It was Michael Hatfield who made the ultimate decision to terminate plaintiff. [Court File No. 14, Hatfield dep'n, p. 35]. Michael Hatfield was unaware that plaintiff's wife had diabetes. [Court File No. 9, Exhibit B, p. 55]. He stated he was unaware how much it would cost USXP to pay Ms. McDonald's medical claims if she were insured under the company's health plan. Id. Likewise, Mr. Hatfield stated that in September 2001 he did not know how much in claims it would have cost USXP if plaintiff, his wife, and their two boys had been insured under USXP's group health policy. Id. at 54. Moreover, because plaintiff's enrollment forms had not been timely turned in and plaintiff was not a participant in the health care plan, any concern about the cost of insuring plaintiff, his wife and two boys would have been speculative. Certainly, however, prior to making the decision to terminate plaintiff, Hatfield could not have received any complaints about the cost of insuring plaintiff, his wife and two children because USXP paid no such costs between January 29, 2001 and September 1, 2001.
Further, Michael Hatfield testified that he did not know that plaintiff's wife had diabetes. [Court File No. 9, Exhibit B, p. 55]. Plaintiff testified during his January 6, 2004, deposition that he had several discussions with Jeff Atchley about insurance and he told Atchley his wife had some medical and dental problems. [Court File No. 14, McDonald dep'n, p. 26]. Plaintiff testified that on one occasion he told Atchley that his wife "was having female problems," however, he stated he did not get more specific in what he told Atchley." Id. at 28. Thus, it appears from the record before the Court that Atchley and Hatfield were not in possession of sufficient specific information such that speculation about the cost of insuring plaintiff, his wife, and two boys would have motivated a decision to terminate plaintiff.
Accordingly, the Court finds that there is no genuine issue of material fact and as a matter of law, plaintiff has failed to show that the legitimate, nondiscriminatory reason advanced by USXP for his termination was pretextual. Therefore, that aspect of USXP's motion for a summary judgment [Court File No. 9] which seeks a summary judgment on plaintiff's wrongful discharge claim under § 510 of ERISA, 29 U.S.C. § 1140, will be GRANTED.
C. Plaintiff's state law claims of fraudulent Inducement.
USXP also seeks a summary judgment on plaintiff's state law claims of fraudulent inducement [Court File No. 9]. USXP argues that it is entitled to a summary judgment on plaintiff's claims of promissory fraud and fraudulent inducement because plaintiff has presented insufficient evidence to allow these claims to go to a jury. [Court File No. 10]. More specifically, USXP argues that there is no evidence that at the time it hired plaintiff it lacked the present intention to provide health insurance benefits. [Court File No. 10].
In his complaint, plaintiff alleges fraudulent inducement. In essence, he alleges that USXP fraudulently induced him accept its offer of employment; namely, he alleges that he relied on defendant's verbal representations and accepted its offer of employment solely due to his need for health insurance. [Court File No. 1, ¶¶ 18, 19]. He seeks damages he incurred as the result of giving up his "valuable and secure" employment to accept USXP's offer of employment. Id. at 20.
Under Tennessee law:
The elements of fraud are an intentional misrepresentation with regard to a material fact; knowledge of the representation's falsity, i.e., it was made "knowingly" or "without belief in its truth" or "recklessly" without regard to its truth or falsity; the plaintiff reasonably relied on the misrepresentation and suffered damages; and the misrepresentation relates to an existing or past fact. Stacks v. Saunders, 812 S.W.2d 587 (Tenn.App. 1990). Claims based on promissory fraud must embody a promise of future action without the present intention to carry out the promise. Id. at 593.Oak Ridge Precision Industries, Inc. v. First Tennessee Bank Nat'l Ass'n, 835 S.W.2d 25, 29 (Tenn.Ct.App. 1992).
As is noted previously, the record shows that USXP made an offer of employment to plaintiff as a Senior Programmer in its Information Technology department. [Court File No. 14, Exhibit A.]. Plaintiff signed the bottom of USXP's January 8, 2001 letter on January 9, 2001, indicating that he agreed to accept USXP's offer of employment. Id.
It is undisputed between the parties that USXP had an insurance program. Indeed the January 8, 2001 letter states in pertinent part:
U.S. Xpress currently offers all employees the opportunity to participate in its Section 125 Cafeteria Plan and subsidizes the majority of the cost of the employee's major medical insurance. Through the Cafeteria Plan, employees have the choice of three major medical plans, all of which are PPO plans through BlueCross BuleShield [sic], with differing deductibles and co-payments. Premiums start at $10.95 per week for employee coverage, $21.90 per week for coverage for the employee plus one dependent, and $43.80 per week for coverage for the employee plus two or more dependents. Employees may then but more comprehensive coverage at higher rates, and all premiums are payroll-deducted on a pre-tax basis.
In addition, the Company provides the $30,000 of term life insurance protection. Employees may also purchase dental, and supplemental vision coverage on a pre-tax basis. Employees will also be able to purchase short and long term disability and supplemental term life on an after-tax basis. Coverage for most of these benefits begins on the first of the month after you have been with the Company for 30 days.Id. (emphasis added).
At the time it extended plaintiff the offer of employment on January 8, 2001, and plaintiff accepted UXSP's offer on January 9, 2001, USXP could not possibly have anticipated the bizarre series of events which occurred between January 9, 2001 and early March 2001, which resulted in plaintiff's insurance enrollment forms sitting in a desk drawer in his home in Huntsville, Alabama and not being returned to USXP within the initial 30-day enrollment period. Thus, the Court finds that at the time USXP made its offer of employment to plaintiff and plaintiff accepted it in early January 2001, there is no evidence of record from which a reasonable juror could find that USXP lacked the present intention to provide future health insurance benefits to plaintiff.
throughout the depositions and his response to plaintiff's motion for summary judgment, plaintiff claims that at the conclusion of the January 29, 2001 orientation session he attempted to turn in his completed enrollment forms to Penny Murray. He stated that he attempted to turn the forms in to Penny Murray and that she told him to turn them in later. [Court File No. 14, McDonald dep'n, p. 33]. He stated that Ms. Murray acted like it was no big deal and that she did not stipulate the number of days in which he had to turn in the forms. Id. at 33-34.
Plaintiff admitted however, that during the orientation session he was given a new hire packet. Id. at 34. Page 29 of the packet, the effective date of coverage paragraph stated:
If you do not enroll during your first thirty days of employment, you will not be eligible to enroll until the next open enrollment which takes place in October of each year for coverage the following January 1 st.Id. at 35. Plaintiff stated that he was given the materials at the orientation session, but "[t]here was nothing in it that said, hey, you have to read this book within 30 days." Id. Plaintiff was asked when he intended to read the documents. He responded, "I mean they didn't pay me to — they weren't paying for my time to read it. So I imagine it's kind of when you get a chance." Id. at 36.
Further, as noted previously, plaintiff claims he had his insurance enrollment forms completed and tried to turn them in at the conclusion of the January 29, 2001 orientation session. However the record contains an instant message session between plaintiff and Jeff Atchely on March 12, 2001.
At 10:03:50, plaintiff asked Jeff Atchley about his insurance. [Court File No. 14, Exhibit D, line 903]. Plaintiff states at the orientation session Penny did not take up the form and I asked her if it needed to be turned in then. She said they could be turned in later. Id. at line 905.
At 10:25:03, plaintiff states have you heard anything about the insurance. Id. 938. Jeff Atchley responds in part, "I'm still trying to find out what we can do . . . I should . . . something this afternoon. Id. at line 939.
A few moments lateral 10:31:33 plaintiff states, "I have the forms her and could fill them out today. I can FedEx if today if needed. I sorry for the push but there may be a problem that we want to check on . . ." Id. at 941.
At that point the instant message session was interrupted, it was resumed at 12:21. At 12:21:37, Atchley inquired of plaintiff, "Did you send that paperwork yet?" Id. at 944. At 12.22 plaintiff responds:
I have it finished, i [sic] was going to lunch in a few and we will have to go somewhere to fax them . . . I don't have a scanner.
I have signed all the papers and filled them out but I did not fill in the dates (hire date . . .)Id. at lines, 944, 945.
In a summary judgment motion, the Court does not decide issues of credibility. However, the Court notes that the March 12, 2001 instant message session casts doubt on the plaintiff's assertion that he had the enrollment forms completed and tried to turn them in on January 29, 2001.
However, evenassuming arguendo that plaintiff did have the forms completed on January 29, 2001, and Penny Murray told plaintiff he did not have to turn them in that day, the record is entirely devoid of any explanation as to why plaintiff could not have faxed or mailed them to USXP at any time between January 30, 2001 and March 1, 2001.
Thus, the Court concludes that even assuming arguendo that plaintiff did have the forms completed on January 29, 2001, and Penny Murray told him that he did not need to turn them in that day, those facts standing alone are insufficient to find that USXP lacked the present intention to deliver the future benefits it had promised to plaintiff; namely, participation in one of its group health insurance plans. See Oak Ridge Precision Industries, 835 S.W.2d at 29.
In his response to defendant's motion for a summary judgment, plaintiff argues that there is no evidence of record that USXP did not intend him to receive the promised raise to compensate him for the benefits. [Court File No. 14, p. 13]. The record shows that in early to mid-March, shortly after plaintiff had informed Jeff Atchley that there was a problem with his insurance because the enrollment forms had not been turned in within the requisite 30-day period, Jeff Atchley spoke with Michael Hatfield and the two explored options which might be available to permit plaintiff to obtain health insurance benefits. [Court File No. 9, Hatfield dep'n, p. 24-26]. One of the options which Hatfield and Atchley discussed was to allow plaintiff to purchase health insurance coverage and to compensate him for the premiums. Id. at 26. Hatfield instructed Atchley to "run" the idea past USXP's HR Department. Id. at 26. Jeff Atchley did discuss the idea with the HR Department and they vetoed the idea. [Court File No. 14, Atchley dep'n, p. 21]. Atchley stated he believed he informed plaintiff that the HR Department had vetoed the idea, but he was not one hundred percent certain of that. Id. at 21.
The discussion(s) about the possibility of raising plaintiff's salary to permit him to purchase outside health insurance benefits occurred in early to mid-March, after plaintiff had informed Jeff Atchley that his health insurance enrollment forms had not been timely turned in. This was more than two months after plaintiff had accepted USXP's offer of employment and more than thirty days after he began his employment with USXP. Therefore, these discussion do not relate to nor do they reflect that USXP lacked the present intent to provide health insurance to plaintiff either at the time the offer of employment was made to plaintiff or when plaintiff accepted USXP's offer of employment.
Moreover, even assuming arguendo that Jeff Atchley promised plaintiff that he would receive a raise in salary and did not tell plaintiff that USXP's HR Department had vetoed the option of raising his salary in order to permit him to purchase health insurance benefits, plaintiff has not set forth such a claim in his complaint before this Court. In his complaint, plaintiff asserted only that USXP engaged in fraudulent inducement in that it knowingly made false promises with him to induce him to accept its offer of employment and leave his otherwise secure employment to work for USXP. [Court File No. 1, ¶¶ 18-20]. However, the record reflects that by the time Atchley would have begun discussing the possibility of a raise in salary in order to permit plaintiff to purchase health insurance from an outside source, plaintiff had already left his previous employer and entered into an employment relationship with USXP. Thus, assuming arguendo that Jeff Atchley promised plaintiff a raise, such a promise would not have been made with the intention of fraudulently inducing plaintiff to enter an into employment relationship with USXP because he was already employed by USXP.
Accordingly, that aspect of defendant's motion for a summary judgment [Court File No. 9] which seeks a summary judgment on plaintiff's state law claims of fraudulent inducement will be GRANTED.
A judgment will enter in favor of U.S. Xpress, Inc.
JUDGMENT
In accordance with the accompanying memorandum opinion, it is ORDERED that the defendant's motion for summary judgment [Court File No. 9] is GRANTED. Defendant U.S. Xpress, Inc. is entitled to JUDGMENT in its favor. The plaintiff's claims are DISMISSED WITH PREJUDICE. Costs are awarded to the defendant. The Clerk shall close the file.