Kane v. Inpatient Med. Servs., Inc. , 2019 Ohio 1975 ( 2019 )

[Cite as Kane v. Inpatient Med. Servs., Inc., 2019-Ohio-1975.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
KATE KANE C.A. No. 29087
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
INPATIENT MEDICAL SERVICES, INC., COURT OF COMMON PLEAS
et al. COUNTY OF SUMMIT, OHIO
CASE No. CV 2017-04-1400
Appellees
DECISION AND JOURNAL ENTRY
Dated: May 22, 2019
CARR, Judge.
{¶1} Plaintiff-Appellant Kate Kane appeals from the judgments of the Summit County
Court of Common Pleas. This Court affirms in part, reverses in part, and remands the matter for
proceedings consistent with this opinion.
I.
{¶2} Defendant-Appellee Inpatient Medical Services, Inc. (“IMS”) provides hospitalist
services to hospitals and post-acute facilities. A hospitalist is a physician who works on-site at a
hospital practicing internal medicine. Ms. Kane was hired by IMS in June 2014 as the regional
vice president of operations. Ms. Kane took leave under the Family Medical Leave Act
(“FMLA”) due to her pregnancies from June 29, 2015 to October 5, 2015, and November 21,
2016 to February 13, 2017. Prior to Ms. Kane’s second FMLA leave, Defendant-Appellee Island
Medical Management, LLC (“Island”) purchased IMS. The purchase closed October 1, 2016.
The morning Ms. Kane returned to work on February 13, 2017, Defendant Justin Meiser, the
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vice president of finance of IMS, told Ms. Kane she was terminated as her position was being
eliminated.
{¶3} In April 2017, Ms. Kane filed a complaint against IMS, Island, and Mr. Meiser
alleging: (1) FMLA interference and retaliation; (2) gender discrimination; (3) discrimination in
violation of public policy; and (4) promissory estoppel. In addition, Ms. Kane sought
declaratory judgment and a preliminary injunction related to a non-compete agreement. Ms.
Kane’s complaint included a jury demand.
{¶4} Thereafter, IMS, Island, and Mr. Meiser filed a motion pursuant to Civ.R. 12(F)
to strike Ms. Kane’s jury demand based upon a waiver contained in Ms. Kane’s employment
agreement. The trial court granted the motion.
{¶5} All of the parties moved for summary judgment; IMS and Island filed a joint
motion for summary judgment, whereas Mr. Meiser filed a separate motion. With respect to Ms.
Kane’s claim of FMLA interference, IMS and Island argued that Ms. Kane’s claim failed
because she was not entitled to reinstatement as her position was eliminated due to a reduction in
force (“RIF”). As to Ms. Kane’s FMLA retaliation claim, IMS and Island asserted that Ms. Kane
could not demonstrate a causal connection between the FMLA leave and her termination, and
thus failed to establish a prima facie case. Moreover, IMS and Island maintained that, even if
she could demonstrate a prima facie case for FMLA retaliation, she could not show that IMS’s
reason for terminating her was pretextual.
{¶6} Ms. Kane responded in opposition to IMS’s and Island’s motion. Ms. Kane
argued that she demonstrated that she was not restored to her original position. Further, while
IMS and Island maintained that Ms. Kane’s termination was part of a 15-20 RIF of IMS
employees, Ms. Kane pointed to evidence contained in two unsigned separation agreements in
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order to demonstrate that IMS’s and Island’s stated reason was erroneous and instead was a
pretext. As to her claim for FMLA retaliation, Ms. Kane argued that because she was terminated
on her first day back from FMLA leave, the only inference that can be made is that she was
terminated for taking FMLA leave.
{¶7} In their reply brief, IMS and Island argued that the trial court should not consider
the separation agreements Ms. Kane relied on in her brief in opposition because they were
inadmissible under Evid.R. 408. With respect to the FMLA interference claim, IMS and Island
again argued that Ms. Kane was not entitled to reinstatement and that she could not demonstrate
IMS’s and Island’s stated reasons for her termination were a pretext. As to the FMLA retaliation
claim, IMS and Island maintained that Ms. Kane could not establish a prima facie case and, even
if she could, she could not demonstrate that the stated reason for her termination was pretextual.
{¶8} On June 1, 2018, the trial court awarded summary judgment to Mr. Meiser on Ms.
Kane’s complaint. On June 4, 2018, the trial court awarded summary judgment to IMS and
Island on Ms. Kane’s complaint. In the entry, the trial court concluded that exhibits 6 and 7,
which were the separation agreements Ms. Kane cited in support of her brief in opposition to
IMS’s and Island’s motion for summary judgment, were not admissible under Evid.R. 408.
Therefore, it declined to consider them in rendering judgment.
{¶9} With respect to the FMLA interference claim, it appears the trial court determined
that Ms. Kane was reinstated to her original position prior to her termination. Thus, the trial
court concluded that Ms. Kane failed to demonstrate a prima facie case. As to the claim for
FMLA retaliation, the trial court concluded that Ms. Kane failed to set forth a prima facie case.
The trial court noted that IMS and Island argued that Ms. Kane was terminated pursuant to the
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RIF, which was unrelated to her FMLA leave, and Ms. Kane made no argument in support of her
claim, aside from her argument concerning temporal proximity.
{¶10} Ms. Kane has appealed, raising four assignments of error for our review. We note
that in her notice of appeal, Ms. Kane specified that she was appealing from the June 4, 2018
entry granting summary judgment to IMS and Island and the order striking her jury demand. In
addition, Ms. Kane has not listed Mr. Meiser as an appellee on her docketing statement.
Accordingly, issues related to the June 1, 2018 entry awarding Mr. Meiser summary judgment
are not before us.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED IN EXCLUDING EXHIBIT 6 AND EXHIBIT 7
FROM ITS CONSIDERATION OF THE MOTION FOR SUMMARY
JUDGMENT.
{¶11} Ms. Kane argues in her first assignment of error that the trial court erred in failing
to consider exhibits 6 and 7 in ruling on the motion for summary judgment.
Background
{¶12} The exhibits at issue are two documents labeled as “Separation Agreement and
Release of Claims[.]” Exhibit 6 is the unsigned separation agreement between an Advanced
Healthcare Associates, LLP (“AHA”) employee and AHA. AHA was purchased by IMS in
February 2015 and was part of the agreement when Island purchased IMS in October 2016.
AHA is an Indiana based entity which provides post-acute care with offices in Indiana and
Kentucky. Exhibit 6 included an appendix that lists employees of AHA and notes whether or not
that person was selected for termination as part of the RIF. The list denotes 14 employees of
AHA terminated as part of the RIF. The list does not include Ms. Kane.
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{¶13} Exhibit 7 is the unsigned separation agreement between IMS and Ms. Kane.
Exhibit 7 provides that the group of individuals covered by the RIF program included Ms. Kane
and the chief executive officer. No other IMS employees are described as being included in the
RIF.
{¶14} In her brief in opposition to IMS’s and Island’s motion for summary judgment,
Ms. Kane pointed out that, in response to an interrogatory asking the reason why she was
terminated, IMS and Island answered: “Shortly after Island purchased IMS * * *, Island decided
to conduct a reduction-in-force consisting of approximately 15-20 employees of IMS. Plaintiff
was included within this reduction-in-force due to the redundancy of her job duties.” (Emphasis
added.) Ms. Kane then argued that information in the separation agreements supported the
notion that Ms. Kane was not actually part of the RIF as she was not listed in the appendix to
exhibit 6. Ms. Kane asserted that such supported the notion that IMS and Island were not
truthful about their reasons for terminating her.
{¶15} In their reply brief, IMS and Island moved the trial court to not consider exhibits 6
and 7 as they asserted the documents were not admissible pursuant to Evid.R. 408. IMS and
Island did not assert that the exhibits were inadmissible for any other reason. The trial court
agreed with IMS and Island and refused to consider the evidence.
Law
{¶16} “A trial court possesses broad discretion with respect to the admission of
evidence.” Wintrow v. Baxter-Wintrow, 9th Dist. Summit No. 29021, 2018-Ohio-5311, ¶ 9.
“The Supreme Court of Ohio has held that * * * a reviewing court should not disturb evidentiary
decisions in the absence of an abuse of discretion that has created material prejudice.” (Internal
quotations omitted.) Id., quoting State v. Diar, 120 Ohio St.3d 460, 2008-Ohio-6266, ¶ 66.
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“Evidence submitted with a motion for summary judgment is proper only if the evidence is
admissible at trial.” (Internal quotations and citations omitted.) Hudson Presbyterian Church v.
Eastminster Presbytery, 9th Dist. Summit No. 24279, 2009-Ohio-446, ¶ 19.
{¶17} Evid.R. 408 provides:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or
offering or promising to accept, a valuable consideration in compromising or
attempting to compromise a claim which was disputed as to either validity or
amount, is not admissible to prove liability for or invalidity of the claim or its
amount. Evidence of conduct or statements made in compromise negotiations is
likewise not admissible. This rule does not require the exclusion of any evidence
otherwise discoverable merely because it is presented in the course of
compromise negotiations. This rule also does not require exclusion when the
evidence is offered for another purpose, such as proving bias or prejudice of a
witness, negativing a contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.
{¶18} “Evid.R. 408 does not prohibit all testimony regarding settlements but rather,
such evidence is admissible under the relevancy test set forth in Evid.R. 401 to impeach or show
bias of a witness.” Scott v. Braun, 7th Dist. Jefferson No. 94-J-13, 1995 WL 697836, *2 (Nov.
22, 1995); see also Cummins v. Great Door & Supply, Inc., 7th Dist. Mahoning No. 02-CA-61,
2003-Ohio-4455, ¶ 20; Taylor v. Davignon, 8th Dist. Cuyahoga No. 79019, 2001 WL 1110338,
*4 (Sept. 13, 2001) (concluding evidence of settlement was properly admitted to impeach
witnesses credibility). “Indeed, Evid.R. 408 provides that evidence of settlement may be used
for several purposes at trial * * *.” Ohio Consumers’ Counsel v. Pub. Util. Comm., 111 Ohio
St.3d 300, 2006-Ohio-5789, ¶ 92. “Evid.R. 408 is applicable only to bar the admission of
evidence which is offered to show that because a settlement offer was made, the offeror must be
liable, because people don’t offer to pay for things for which they are not liable.” (Internal
quotations omitted.) USCA/USA, Inc. v. High Tech Packaging, Inc., 6th Dist. Wood Nos. WD-
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05-088, WD-05-089, 2006-Ohio-6195, ¶ 34, quoting Boyle v. Daimler Chrysler Corp., 2d Dist.
Clark No. 2001-CA-81, 2002-Ohio-4199, ¶ 95.
Discussion
{¶19} On appeal, Ms. Kane argues that exhibits 6 and 7 were offered “to rebut IMS’s
claimed defense that [Ms. Kane] was part of a 15-20 employee RIF from IMS.” Thus, it appears
that Ms. Kane argues that the evidence was being offered to impeach IMS’s and Island’s
explanation as to why she was terminated. In response to the interrogatory requesting the reason
for Ms. Kane’s termination, IMS and Island answered that Ms. Kane was part of a RIF of
approximately 15-20 IMS employees. Exhibit 6 indicates 14 AHA employees were terminated
due to a RIF and exhibit 7 indicates that Ms. Kane and another IMS employee were included in
the RIF. Ms. Kane is not included in the list of employees in exhibit 6. Thus, exhibits 6 and 7
can be viewed to contradict the explanation for Ms. Kane’s termination provided in the answer to
the interrogatory. The separation agreements do not appear to support that 15-20 IMS
employees were subject termination because of a RIF.
{¶20} We agree that the trial court abused its discretion in refusing to consider exhibits 6
and 7 in its determination of the motion for summary judgment. Ms. Kane did not seek to rely
on exhibits 6 and 7 to show that “because a settlement offer was made, the offeror must be
liable[.]” USCA/USA, Inc., 2006-Ohio-6195, at ¶ 34. In fact it seems that it is only incidental
that the RIF information Ms. Kane seeks to utilize is contained in the separation agreements.
Ms. Kane does not seek to disclose the terms of the agreements or really even the existence of a
settlement agreement. Instead, Ms. Kane seeks to demonstrate that IMS’s and Island’s proffered
reason for termination was false. This is impeachment evidence. See Scott, 1995 WL 697836, at
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*2. Further, in light of the fact that the reason for Ms. Kane’s termination is a central fact in this
matter, we also conclude Ms. Kane was prejudiced by the omission of the evidence.
{¶21} Ms. Kane’s first assignment of error is sustained.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO
THE DEFENDANTS FOR KATE’S CLAIM OF FMLA INTERFERENCE.
THERE ARE FACTUAL ISSUES AS TO WHETHER IMS’ PROFFERED
REASONS FOR FIRING KATE ARE TRUE. THE DEFENDANTS ARE
LIABLE FOR FMLA INTERFERENCE BECAUSE THEY DID NOT
RESTORE KATE TO HER ORIGINAL POSITION.
ASSIGNMENT OF ERROR III
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO
THE DEFENDANTS FOR KATE’S CLAIM OF FMLA RETALIATION.
THERE ARE FACTUAL ISSUES AS TO WHETHER IMS’S PROFFERED
REASONS FOR FIRING KATE ARE TRUE. THE DEFENDANTS ARE
LIABLE FOR FMLA RETALIATION BECAUSE THEY FIRED KATE THE
DAY SHE RETURNED TO WORK AND NOT ON THE DATE THEY CLAIM
THEY DECIDED ON THE RIF.
{¶22} Ms. Kane argues in her second assignment of error that the trial court erred in
granting summary judgment to IMS and Island on her claim of FMLA interference. Ms. Kane
argues in her third assignment of error that the trial court erred in granting summary judgment to
IMS and Island on her FMLA retaliation claim.
{¶23} In light of the fact that this Court has concluded that the trial court improperly
excluded exhibits 6 and 7 from its consideration in ruling on the motion for summary judgment,
we conclude that the trial court must first consider that evidence, along with the remainder of the
evidence, and then determine whether summary judgment was appropriate. This Court is
mindful that it is a reviewing court and it is not its role to consider arguments and evidence that
were not first considered by the trial court. See McAllister v. Myers Industries, Inc., 9th Dist.
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Summit No. 29040, 2019-Ohio-773, ¶ 23 (“This Court is a reviewing Court, and as such, we
would be exceeding the scope of our role if we were to consider this in the first instance.”).
{¶24} Ms. Kane’s second and third assignments of error are sustained to the limited
extent that we conclude that the trial court erred in awarding summary judgment without
considering exhibits 6 and 7 in its review.
ASSIGNMENT OF ERROR IV
THE TRIAL COURT ERRED IN STRIKING THE JURY DEMAND.
{¶25} Ms. Kane argues in her fourth assignment of error that the trial court erred in
striking her jury demand. Ms. Kane argues that the jury trial waiver in her employment
agreement did not encompass her claims and that her right to a jury trial was not voluntarily,
knowingly, and intelligently waived. Ms. Kane has not argued that the presence of a jury trial
waiver in an employment agreement is inherently problematic.
{¶26} The waiver at issue is contained in Ms. Kane’s employment agreement. It reads:
Waiver of Jury trial. EACH PARTY HERETO ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
(Emphasis in original.)
{¶27} Ms. Kane asserts that her discrimination claims fall outside the scope of the
waiver because the waiver does not expressly reference discrimination claims. Ms. Kane has not
pointed to any authority that would require that a jury trial waiver be that specific in order to be
valid. See App.R. 16(A)(7). Undoubtedly, the waiver provision is broad. It encompasses “any
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litigation directly or indirectly arising out of or relating to this agreement and any of the
agreements delivered in connection herewith or the transactions contemplated hereby or
thereby.” This Court must conclude that Ms. Kane’s claims alleging discriminatory termination
at the very least indirectly arise out of or relate to Ms. Kane’s employment agreement. The
employment agreement defines the parties’ employment relationship and includes a section
concerning termination. Ms. Kane’s claims of discriminatory termination necessarily arise out
that employment relationship.
{¶28} Ms. Kane additionally argues that she did not voluntarily, knowingly, and
intelligently waive her right to a jury trial.
{¶29} “Both Article I, Section 5 of the Ohio Constitution and Civ.R. 38(A) provide that
the right to a trial by jury is inviolate.” Princess Kim, L.L.C. v. U.S. Bank, N.A., 9th Dist.
Summit No. 27401, 2015-Ohio-4472, ¶ 6. Nonetheless, “[t]he Ohio Supreme Court has
recognized that parties may waive the right to a trial by jury without offending the constitutional
protection.” Id. at ¶ 9, citing Cassidy v. Glossip, 12 Ohio St.2d 17 (1967), paragraph one of the
syllabus. “As long as circumstances do not indicate that the waiver was entered into
unknowingly or involuntarily or that one party had no meaningful choice in the transaction but to
agree to the jury waiver, such waivers have routinely been upheld by courts in Ohio and
elsewhere[.]” (Internal quotations omitted.) Princess Kim, L.L.C. at ¶ 9, quoting Garcia v.
Wayne Homes, LLC, 2d Dist. Clark No. 2001 CA 53, 2002 WL 628619, *10 (Apr. 19, 2002).
{¶30} Federal courts often use a five-factor test in evaluating whether a jury waiver was
entered into knowingly, voluntarily, and intelligently; this test has also been used in cases
involving waivers contained in employment agreements. See Hooper v. Ideal Image Dev. Corp.,
M.D.Florida No. 8:14-CV-2778-T-30EAJ, 2015 WL 1508494, *1 (Apr. 1, 2015). Under this
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test, courts consider “1) the conspicuousness of the provision of the contract; 2) the level of
sophistication and experience of the parties entering into the contract; 3) the opportunity to
negotiate terms of the contract; 4) the relative bargaining power of each party; and 5) whether the
waiving party was represented by counsel.” Id. “No single factor is determinative; rather, the
Court must determine whether, in light of all the circumstances, the Court finds the waiver to be
unconscionable, contrary to public policy, or simply unfair.” (Internal quotations and citations
omitted.) Id.{¶31} We note that while the provision appears towards the end of the agreement, the
provision is nonetheless conspicuous as it appears in all capital letters while most of the
agreement does not. See id. Ms. Kane has not argued she was unaware that the provision was in
the agreement. Ms. Kane is a college-educated professional with experience negotiating
contracts. See id. In fact, there was evidence that Ms. Kane negotiated a higher salary prior to
accepting an offer of employment. There was no evidence presented that would indicate Ms.
Kane did not have a meaningful choice with respect to the waiver. See Princess Kim, L.L.C.,
2015-Ohio-4472, at ¶ 9. And while the record does not indicate whether Ms. Kane was
represented by counsel at the time she was offered a job, the employment agreement does
contains a clause indicating that Ms. Kane “had the opportunity for th[e] Agreement to be
reviewed by counsel[.]” See Hooper at *1. Ms. Kane’s mere assertions that she did not
understand she would be waiving her right to a jury trial for these claims is insufficient under the
circumstances to demonstrate that the waiver was not entered into voluntarily, knowingly, and
intelligently. We cannot say that the waiver is unduly complicated or confusing such that
someone of Ms. Kane’s background would not have understood the scope of the right she was
waiving.
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{¶32} Ms. Kane’s fourth assignment of error is overruled.
III.
{¶33} Ms. Kane’s first assignment of error is sustained. Ms. Kane’s second and third
assignments of error are sustained to the extent discussed above. Ms. Kane’s fourth assignment
of error is overruled. The judgment of the Summit County Court of Common Pleas is affirmed
in part, reversed in part, and the matter is remanded for proceedings consistent with this decision.
Judgment affirmed in part,
reversed in part,
and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
DONNA J. CARR
FOR THE COURT
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TEODOSIO, P. J.
SCHAFER, J.
CONCUR.
APPEARANCES:
BRETT M. MANCINO, Attorney at Law, for Appellant.
ROBERT E. BLACKHAM, PAUL L. JACKSON, and NATHAN PANGRACE, Attorneys at
Law, for Appellee.