Smith, Susan L. v. American Federation , 247 F. App'x 804 ( 2007 )


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  •                    NONPRECEDENTIAL DISPOSITION
    To be cited only in accordance with
    Fed. R. App. P. 32.1
    United States Court of Appeals
    For the Seventh Circuit
    Chicago, Illinois 60604
    Argued June 4, 2007
    Decided August 1, 2007
    Before
    Hon. KENNETH F. RIPPLE, Circuit Judge
    Hon. ILANA DIAMOND ROVNER, Circuit Judge
    Hon. DIANE S. SYKES, Circuit Judge
    No. 06-4176
    SUSAN L. SMITH,                               Appeal from the United States
    Plaintiff-Appellant,                      District Court for the Central
    District of Illinois.
    v.
    No. 05 C 3031
    AMERICAN FEDERATION OF
    STATE, COUNTY AND                             Jeanne E. Scott,
    MUNICIPAL EMPLOYEES,                          Judge.
    Illinois Council 31,
    Defendant-Appellee.
    ORDER
    Susan Smith maintains she was terminated in violation of ERISA because her
    employer no longer wanted to pay her high medical expenses. However, Smith
    admits her termination occurred after she refused to attend a closed-door meeting
    with her supervisor despite being warned her refusal would result in discipline.
    She also admits her termination was ordered by an individual who was unaware of
    her ongoing expensive medical treatment. Because Smith has failed to demonstrate
    that the defendant’s proffered reason for her termination was pretextual, we affirm
    No. 06-4176                                                                  Page 2
    the district court’s grant of summary judgment to the defendant.
    I. Background
    Susan Smith was employed by Illinois Council 31 of the American Federation of
    State, County and Municipal Employees (“Council 31”) from 1990 to 2003. At the
    time of her termination, she was an administrative accountant in the Springfield
    office, and her duties included accounting and administering payroll. Although
    Smith’s position was nonunion, she was covered by the same health and disability
    benefits plan as the union employees. Under that ERISA-qualified plan, Council 31
    pays employee claims up to a stop/loss point, after which it is reimbursed by an
    insurance carrier. When Smith worked at Council 31, that point was around
    $60,000 per beneficiary, and $2 million in the aggregate.
    Smith’s direct supervisor at the time of her termination was Business Manager
    William Sarver, who also worked in the Springfield office. Sarver, in turn, reported
    to Executive Director Henry Bayer, who worked in the Chicago office. Although
    Bayer approved Council 31’s monthly financial reports, Sarver reviewed weekly
    expense reports, including employees’ insurance claims. According to Smith, Sarver
    reviewed these claims in detail and often showed interest in why employees were
    taking certain medications or submitting large bills. A customer service
    representative for Council 31’s insurance provider stated that Sarver typically
    inquired into the conditions, prognoses, and future costs of employees who
    submitted large medical bills.
    In 1998 Smith was diagnosed with a brain aneurysm and underwent surgery for
    treatment. As a result, her medical bills for 1998 totaled $52,810.57, which
    Council 31’s plan paid in full. Smith returned to work about three weeks after her
    surgery. Then in 2003, she underwent a CT scan that showed an unrelated brain
    tumor. She informed Council 31 that she needed a leave of absence to undergo
    another surgery, and the leave was granted. Smith underwent surgery to remove
    the tumor on May 22, 2003, and her resulting medical expenses totaling $31,391.94
    were paid by Council 31.
    Smith returned to work part-time on August 11, 2003. That morning, she met
    with Sarver, who asked how she was feeling. Smith told him she was fine, but that
    the doctors had been unable to remove the entire tumor during the surgery. As a
    result, she said, she would need a CT scan every six months and would probably
    need additional brain surgery in the future. Smith had Sarver feel the scar on her
    head; Sarver asked if the tumor was cancerous, and Smith told him it was benign.
    Sarver also asked why Smith was wearing glasses, and she responded that the
    swelling in her brain was preventing her eyes from focusing correctly. They also
    discussed how her condition prevented her from walking in a straight line. During
    the course of this fifteen-minute conversation, Office Manager Stacey Pflugmacher
    No. 06-4176                                                                    Page 3
    was present but did not participate.
    Smith began working full-time the next week. According to Council 31, a
    number of problems arose during these first two weeks of her return. Smith took
    an emergency vacation day without providing an explanation or receiving
    permission and took a few hours off another day. Smith maintained she should be
    paid for these absences out of sick and vacation time she accrued during her three-
    month absence, but Sarver and Pflugmacher maintained she accrued no time
    during that period. A dispute arose over a payroll check for which Pflugmacher
    maintained Smith miscalculated the withholding. Smith also sent department
    correspondence out in her own name, which Sarver maintains he had repeatedly
    told her not to do.
    Sarver had a telephone conversation with Smith on Friday, August 22, to discuss
    these issues. During that conversation, Smith disputed the existence of any
    problems. When Sarver informed her she needed to provide a reason for taking
    emergency vacation days, Smith asked him if he was harassing her. Sarver
    described the call as confrontational, and he decided to have an in-person meeting
    with Smith the next week. On August 23 Sarver prepared notes listing the topics to
    discuss at the meeting. The next day, he had a telephone conversation with Bayer
    and discussed his concerns about Smith. Bayer told him to meet with Smith and
    explain his expectations, but to give her a chance to correct the problems before
    implementing discipline or termination. It is unclear who mentioned termination
    first, but Sarver and Bayer agree Bayer explicitly instructed Sarver not to
    terminate Smith.
    Smith was out of the office on August 25, so on the morning of August 26 Sarver
    asked her to come to his office for a meeting. Once Smith arrived, Pflugmacher,
    who was also present, asked if she should close the door; Sarver said yes. Smith
    then stated that she would not participate in a closed-door meeting and rose to
    leave. Sarver ordered her to stay, but she refused and said she was going to call
    Bayer. Sarver told her to go ahead, and she left his office. Smith and Sarver then
    both called Bayer, and Sarver reached him first. After learning what had
    happened, Bayer told Sarver to direct Smith to attend the meeting or face
    discipline. Bayer then spoke with Smith, who asked to bring a witness or
    tape-record the meeting; Bayer denied both requests and told her the meeting was
    not disciplinary. He instructed Smith to attend the closed-door meeting or face
    discipline. Bayer then called Sarver again and told him to terminate Smith if she
    still refused. Shortly thereafter, Sarver called Smith to his office again; she came,
    but she stood in the doorway to prevent the door from being closed. Sarver then
    terminated her and gave her five minutes to vacate the premises.
    After her termination, Smith filed retaliatory termination claims under the
    Americans with Disabilities Act (“ADA”) and Section 510 of the Employee
    No. 06-4176                                                                       Page 4
    Retirement and Income Security Act (“ERISA”) maintaining she was fired to save
    Council 31 the costs of her future medical treatment. Council 31 filed for summary
    judgment on both claims. Smith conceded the ADA claim could not stand because
    she was not disabled within the terms of the statute, but she maintained there was
    sufficient evidence to demonstrate her termination violated ERISA. The district
    court disagreed, and instead concluded Smith failed to provide sufficient evidence
    that Council 31’s proffered reason for terminating her—insubordination in refusing
    to attend the meeting—was pretextual. The court thus granted Council 31
    summary judgment on both claims. Smith now appeals the grant of summary
    judgment on her ERISA claim.
    II. Discussion
    We review de novo a district court’s grant of summary judgment, viewing the
    evidence in the light most favorable to the nonmoving party. Healy v. City of Chi.,
    
    450 F.3d 732
    , 738 (7th Cir. 2006). Summary judgment is appropriate when “the
    pleadings, depositions, answers to interrogatories, and admissions on file, together
    with the affidavits, if any, 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).
    Section 510 of ERISA prohibits discharging an employee with the specific intent of
    preventing or retaliating against the employee’s use of an ERISA-qualified benefits
    plan. 
    29 U.S.C. § 1140
    . When establishing this prohibited intent through indirect
    evidence, as Smith seeks to do, a plaintiff must demonstrate that she: (1) was a
    member of a protected class; (2) was qualified for her job; and (3) was discharged under
    circumstances that provide some basis for believing the prohibited intent was present.
    See Lindemann v. Mobil Oil Corp., 
    141 F.3d 290
    , 296 (7th Cir. 1998). As in all cases
    involving this method of indirect proof, if the plaintiff succeeds in making a prima facie
    case, the burden shifts to the defendant to present a legitimate, nondiscriminatory
    reason for its action. See Grottkau v. Sky Climber, Inc., 
    79 F.3d 70
    , 73 (7th Cir.1996).
    Once it has done so, the burden shifts back to the plaintiff to present evidence that the
    proffered reason is pretextual, i.e., is “a deliberate falsehood.” See Forrester v.
    Rauland-Borg Corp., 
    453 F.3d 416
    , 419 (7th Cir. 2006).
    Smith maintains the district court erroneously concluded she failed to make out a
    prima facie case of Council 31’s prohibited intent. According to Smith, this conclusion
    resulted from the court’s incorrect refusal to draw an inference of prohibited intent
    from the temporal proximity of her August 11 meeting with Sarver and her August 26
    termination. Although the district court’s conclusion on the prima facie element is not
    entirely clear from its opinion, we need not resolve this dispute because Council 31 has
    come forward with a legitimate explanation for Smith’s termination. See Lindemann,
    
    141 F.3d at 296
     (“[I]t is unnecessary for this Court to determine whether a plaintiff has
    established a prima facie case where a defendant has advanced a legitimate,
    No. 06-4176                                                                          Page 5
    nondiscriminatory reason for its action.”). Accordingly, we will proceed under the
    assumption that Smith has proven her prima facie case, and turn to the question of
    whether she has provided sufficient evidence that Council 31’s proffered reason for her
    termination was pretextual.
    Smith has provided no evidence to dispute Council 31’s claim that she was
    insubordinate. Indeed, Smith concedes she was instructed multiple times to attend the
    closed-door meeting but nonetheless refused, and further admits she was warned her
    refusal would result in discipline. Smith insists her insubordination is irrelevant
    because Sarver intended to fire her all along.1 We disagree; having brought about
    termination through her own insubordination, Smith cannot recover on the theory that
    her superiors might have fired her for a prohibited reason had she given them the
    chance. Moreover, Smith’s evidence regarding Sarver’s intent is irrelevant because the
    order to terminate came from Bayer, not Sarver. Smith admits she never discussed her
    ongoing treatment with Bayer, and she provides no evidence that he was aware of the
    future costs she might incur. Absent such knowledge, Bayer cannot have acted with
    the prohibited intent Smith suggests. Accordingly, Smith has failed to present a
    genuine dispute as to the legitimacy of Council 31’s proffered reason for her
    termination. The district court’s grant of summary judgment is thus AFFIRMED.
    1
    Smith also makes some mention of Council 31’s failure to follow union contract policies for
    escalating discipline prior to termination. We need not consider this argument because Smith
    concedes her position was not covered by the union contract.