Denham v. Sunoco, Inc. ( 2007 )


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  •                                                                       F I L E D
    United States Court of Appeals
    Tenth Circuit
    UNITED STATES CO URT O F APPEALS
    February 21, 2007
    FO R TH E TENTH CIRCUIT                Elisabeth A. Shumaker
    Clerk of Court
    JOHN M . DENHAM ,
    Plaintiff-Appellant,
    v.                                                  No. 06-5040
    (D.C. No. 01-CV -219-E)
    SUNOCO, INC. (R& M ),                               (N.D. Okla.)
    Defendant-Appellee.
    OR D ER AND JUDGM ENT *
    Before O ’B RIE N and BROR BY, Circuit Judges, and BRO W N, ** District Judge.
    Plaintiff-appellant John Denham appeals from the judgment of the
    district court rejecting his claim that he was terminated from his job with
    defendant-appellee Sunoco, Inc., in violation of common law and § 510 of
    ERISA, 
    29 U.S.C. § 1140
    . In arriving at its judgment, the district court
    *
    After examining the briefs and appellate record, this panel has determined
    unanimously to grant the parties’ request for a decision on the briefs without oral
    argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
    ordered submitted without oral argument. This order and judgment is not binding
    precedent, except under the doctrines of law of the case, res judicata, and
    collateral estoppel. It may be cited, however, for its persuasive value consistent
    with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
    **
    The H onorable W esley E. Brown, Senior District Judge, District of K ansas,
    sitting by designation.
    concluded that Sunoco’s reason for terminating M r. Denham was both reasonable
    and believable. Aplt. App., Vol. I at 63. Our jurisdiction arises under 
    28 U.S.C. § 1291
    , and we affirm.
    Sunoco at all relevant times owned and operated a lubricants refinery in
    Tulsa, Oklahoma. M r. Denham had been employed by Sunoco since December
    1976. On M ay 25, 2000, M r. Denham began a medical leave of absence due to
    neck, left shoulder, and back ailments and began receiving short-term disability
    payments under Sunoco’s disability income plan. As required by company policy,
    M r. Denham periodically reported his medical condition to his supervisor and to
    Sunoco’s company doctor at the Tulsa refinery, Dr. Campbell. M r. Denham also
    gave consent for his medical records to be shared with Sunoco, which Sunoco
    later received.
    During the time M r. Denham was on disability leave, his supervisor,
    M r. M anard, heard comments from other Sunoco employees indicating that
    M r. Denham may have been engaging in physical activities apparently
    incompatible with his disabilities. In order to verify these rumors, Sunoco hired
    a private investigative agency to look into the matter. That agency hired
    Rex M erritt, a local investigator experienced in surveillance work, to follow
    M r. Denham and videotape his activities.
    Upon the completion of his surveillance, M r. M erritt submitted a videotape
    to Sunoco’s human resources (HR) department along with an affidavit identifying
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    the subject of the tape as M r. Denham. On November 15, 2000, M r. Denham met
    with Dr. Campbell who examined M r. Denham and gave him a release to return to
    work. Shortly after the completion of his visit with Dr. Campbell, and while still
    on refinery property, M r. D enham was summoned to Sunoco’s HR department.
    There he met with several of Sunoco’s management personnel, some of whom had
    already review ed the videotape and M r. M erritt’s affidavit. The tape was shown
    again, this time to M r. Denham, Dr. Campbell, and other HR personnel. After
    telling Dr. Campbell that the person in the videotape was M r. Denham, Krista
    Turney, Sunoco’s HR manager, asked Dr. Campbell whether “[w]ith the
    limitations and restrictions that we understood that [M r. Denham] had, could he
    be doing those types of activities that we had reviewed.” A plt. App., Vol. II
    at 427. The doctor’s opinion was that M r. Denham could not be doing the
    activities caught on the video. 
    Id.
     W hen Dr. Campbell was asked at trial whether
    M s. Turney “elicited an opinion from you that if this was M r. Denham on the
    tape, he could not be doing the kinds of things or should not be doing the kinds of
    things depicted there if he had limitations imposed as you understood them to be,”
    
    id.,
     the doctor replied, “[m]y opinion was that he could not be doing those things
    as I saw on the video,” 
    id.
    During the November 15, 2000, meeting, M r. Denham admitted being the
    person in the early part of the video shown working on a black truck and making
    a trip to a local auto-supply store. He denied, however, being the person shown
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    later in the video unloading fifty-pound sacks. M s. Turney told M r. Denham that
    he would not be returning to work until the investigation into his disability claim
    was finalized. Aplt. App., Vol. I at 75. M r. Denham w as eventually discharged
    on January 10, 2001, after the Tulsa refinery personnel review ed the matter w ith
    corporate officials in the company’s Philadelphia headquarters.
    In response to his discharge, M r. Denham filed suit in O klahoma state court
    alleging wrongful termination. Sunoco removed the action to federal district
    court, alleging, inter alia, that M r. D enham’s claims were preempted by ERISA.
    M r. Denham then amended his complaint to include a claim under ERISA § 510,
    
    29 U.S.C. § 1140
    , alleging that he was unlawfully terminated because he sought
    and obtained disability benefits from Sunoco’s disability income plan.
    Both parties filed motions for summary judgment which were denied, and
    trial proceeded to the court on August 2-5, 2004. In ruling for Sunoco, the
    district court made extensive findings of fact and concluded, for purposes of this
    appeal, that Sunoco’s termination of M r. Denham’s employment was reasonable
    and that the reason given was believable. M r. Denham’s § 510 claim therefore
    failed because M r. Denham had not established that Sunoco’s proffered reason for
    terminating him was a pretext for illegal discrimination.
    Although M r. Denham identifies seven different propositions on appeal, his
    case essentially presents three grounds upon which he urges us to find error in the
    decision of the district court: (1) that he was denied ERISA ’s procedural and
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    substantive safeguards; (2) that, for a variety of reasons, Sunoco’s proffered
    explanation for his termination was not reasonable and believable and thus was a
    pretext for discrimination; and (3) that his breach-of-contract claim was
    preem pted by ER ISA .
    M r. Denham argues that Sunoco’s disability plan administrator, and not the
    Tulsa refinery HR personnel, should have conducted the inquiry into his disability
    status. He views this as evidence that he was denied ERISA ’s substantive and
    procedural safeguards. After de novo review of this legal question, we disagree.
    First, M r. Denham points to no provision in the disability plan precluding the type
    of investigative effort engaged in by the Tulsa HR department, or to any provision
    in the plan or in the law reserving this type of discrete employment investigation
    and decision to the plan administrator. Second, M r. Denham at all times received
    all the short-term and medium-term disability payments to which he was entitled
    during his employment with Sunoco. This action to enforce ERISA’s § 510 anti-
    discrimination provision is the proper remedy for an allegedly discriminatory
    termination; M r. Denham was not denied any procedural or substantive rights
    under ERISA . M r. Denham’s citation of general ERISA provisions declaring
    basic ERISA policy and providing rights and remedies for plan participants is
    irrelevant.
    M r. Denham’s second issue is the crux of this appeal. Section 510 makes
    it “unlawful for any person to discharge . . . a participant or beneficiary for
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    exercising any right to which he is entitled under the provisions of an employee
    benefit plan . . . or for the purpose of interfering with the attainment of any right
    to which such participant may become entitled under the plan.” 
    29 U.S.C. § 1140
    . “[A]dverse employer action taken because an employee engages in
    protected activity [here the claiming of disability benefits], including exercising,
    or attempting to attain, any right under a plan or ERISA ” constitutes illegal
    discrimination. Garratt v. Walker, 
    164 F.3d 1249
    , 1255 (10th Cir. 1998). In
    proving illegal discrimination, the employee may resort to direct or indirect
    evidence, but he must prove that the “adverse employment action was motivated
    by an intent to interfere with employee benefits protected by ERISA . The
    employee is not required to show that the employer’s sole motivation was to
    interfere with employee benefits, [he] need only show that it was a motivating
    factor.” 
    Id. at 1256
     (quotation and citations omitted).
    In reviewing the evidence, the district court found that the investigator,
    M r. M erritt, was able to identify M r. Denham and capture him on the videotape,
    although it was not clear from the videotape whether it was actually M r. Denham
    seen unloading the fifty-pound sacks. M r. M erritt, however, provided Sunoco
    with an affidavit to accompany the videotape stating that, with the use of
    binoculars, he could identify M r. D enham as the person moving the sacks.
    Sunoco personnel showed the videotape to Dr. Campbell and told him that the
    person in the tape was M r. Denham. W hen he was asked whether a person with
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    M r. Denham’s disability could perform the activities depicted in the videotape,
    Dr. Campbell opined that such activity would be unlikely. Aplt. App., Vol. II at
    427. Based on these facts, the district court concluded that M r. Denham’s
    termination was reasonable, and the reasons given to justify it w ere believable.
    M r. Denham, therefore, failed to “demonstrate that the proffered reason for
    termination was pretextual.” 
    Id.,
     Vol. I at 63-64.
    “W hen there is conflicting evidence from which different inferences may be
    drawn regarding the reasonableness of [a defendant’s] conduct, then what is
    reasonable is always a question to be determined by the trier of fact.” Sims v.
    Great Am. Life Ins. Co., 
    469 F.3d 870
    , 891 (10th Cir. 2006) (quotation omitted).
    W e review factual determinations for clear error, giving due deference to the trial
    judge’s opportunity to evaluate w itnesses’ credibility. Fed. R. Civ. P. 52(a); see
    also U nited States v. M cIntyre, 
    997 F.2d 687
    , 709 (10th Cir. 1993) (refusing to
    reexamine credibility of witnesses’ testimony or decide between competing
    interpretations of testimony); Zimmerman v. Sloss Equip., Inc., 
    72 F.3d 822
    , 825
    (10th Cir. 1995) (noting that “[w]hen findings are based on determinations
    regarding the credibility of witnesses, Rule 52(a) demands even greater deference
    to the trial court’s findings”).
    In challenging the district court’s decision, M r. Denham argues that it was
    contradicted by the overwhelming weight of the evidence. Specifically, he points
    to objective evidence in the record of his disability; argues that the videotape
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    relied on by Sunoco was unreliable, untrustworthy, and inadmissible; contends
    that Dr. Campbell’s oral opinion rendered at the November 15, 2000, meeting
    about M r. Denham’s ability to perform the tasks documented in the videotape was
    ambiguous; and chastises Sunoco for failing to review the medical record in its
    possession, to get Dr. Campbell’s opinion in writing, or to question Dr. Campbell
    about possible fraud. W hile M r. Denham may make some valid arguments, they
    are basically beside the point.
    In Kariotis v. Navistar International Transportation Corp., 
    131 F.3d 672
    ,
    674 (7th Cir. 1997), an employee sued her former employer for terminating her
    employment, allegedly in violation of ERISA, among other federal statutes. As in
    this case, the employee was suspected of fraudulently accepting disability
    benefits, and the employer hired a company to videotape her movements while on
    leave. Describing the investigation as leaving “something to be desired,” 
    id. at 675
    , and “hardly look[ing] world class,” 
    id. at 677
    , the Seventh Circuit
    nonetheless affirmed part of the district court’s summary judgment in favor of the
    employer because, while the plaintiff offered several pertinent criticisms of the
    employer’s evaluation process, she had failed to advance “facts tending to show
    that the employer’s reasons for some negative job action are false, thereby
    implying (if not actually showing) that the real reason was illegal discrimination.”
    
    Id.
     The court noted that, “arguing about the accuracy of the employer’s
    assessment is a distraction, because the question is not whether the employer’s
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    reasons for a decision are right but whether the employer’s description of its
    reasons is honest.” 
    Id.
     (citation and quotation omitted). After noting that there
    were probably better w ays of investigating an employee’s suspected dishonesty
    than those resorted to by the employer, the court went on to note that, “[y]et this
    investigation was the reason given for the discharge, and a reason honestly
    described but poorly founded is not a pretext as that term is used in the law of
    discrimination.” 
    Id.
     (quotation omitted). The court concluded that “whatever
    curious process a company employs to reach its decisions is irrelevant so long as
    nothing in the record suggests that the process is discriminatory.” 
    Id. at 679
    .
    This court cited Kariotis in Bullington v. United Air Lines, Inc., 
    186 F.3d 1301
     (10th Cir. 1999), implicitly overruled on other grounds as recognized by
    Boyler v. Cordant Techs., Inc., 
    316 F.3d 1137
    , 1140 (10th Cir. 2003), a case
    involving a charge of age discrimination in hiring. There we noted that “[t]he
    relevant inquiry is not whether [defendant’s] proffered reasons were wise, fair or
    correct, but whether [defendant] honestly believed those reasons and acted in
    good faith upon those beliefs.” Bullington, 
    186 F.3d at 1318
    . Similarly, in
    Kendrick v. Penske Transportation Services, Inc., 
    220 F.3d 1220
     (10th Cir. 2000),
    a § 1981 case challenging a job termination on the basis of race discrimination,
    this court explained that “a challenge of pretext requires us to look at the facts as
    they appear to the person making the decision to terminate plaintiff.” Id. at 1231.
    See also M cKnight v. Kimberly Clark Corp., 
    149 F.3d 1125
    , 1129 (10th Cir.
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    1998) (finding that plaintiff failed to establish pretext where the defendant
    discharged plaintiff after conducting an investigation into a subordinate
    employee’s allegations of sexual misconduct on the part of the plaintiff and
    believed the allegations to be true, even though plaintiff presented evidence to the
    district court that the allegations may have been false).
    Here, Sunoco had before it (1) reports from other employees regarding
    M r. Denham’s activities while collecting short-term disability; (2) a videotape
    indisputably showing M r. Denham working on his truck and doing errands w ith
    no apparent impairment in movement; (3) a signed affidavit from a private
    investigator identifying M r. Denham as the person in the videotape lifting
    fifty-pound sacks; and (4) the opinion of the company doctor that a person with
    M r. Denham’s impairments could not be engaging in the activity depicted in
    the videotape.
    Given these circumstances, we find no error in the district court’s
    conclusion that M r. Denham failed to prove pretext because Sunoco’s reason for
    terminating him was both reasonable and believable. “W e have repeatedly held
    that the relevant inquiry in such cases concerns the belief of the employer that the
    employee engaged in misconduct, not whether the actual facts, as shown by
    evidence extrinsic to the employer’s assessment, may have been otherwise.”
    Sorbo v. United Parcel Serv., 
    432 F.3d 1169
    , 1178 (10th Cir. 2005). “[D]istrict
    courts, when analyzing the pretext issue, do not sit as super-personnel
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    departments free to second-guess the business judgment of an employer.”
    Bullington, 
    186 F.3d at
    1318 n.14.
    Finally, M r. Denham does not take issue with the district court’s conclusion
    that his failure to follow the proper grievance procedure was grounds to dismiss
    his common-law contract claim for failure to exhaust administrative remedies.
    See Aplt. App., Vol. I at 61. Instead, M r. Denham argues that his state-law claim
    for breach of employment contract is preempted by ERISA , which does not have
    an exhaustion requirement. Because we affirm the district court’s conclusion that
    M r. Denham has failed to sustain his ERISA -based claim of improper job
    termination, it will avail M r. Denham nothing for us to determine that his
    common-law claim was preempted by ERISA. W e therefore need not reach this
    issue.
    The judgment of the district court is AFFIRMED.
    Entered for the Court
    Terrence L. O’Brien
    Circuit Judge
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