Taylor v. Huntington National Bank, The

MOTION to dismiss for failure to state a claim

W.D. Mich.March 6, 2017

THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN ANTON TAYLOR, Plaintiff, vs. THE HUNTINGTON NATIONAL BANK, Defendant. CASE NO. 1:16-cv-01301 HON. PAUL L. MALONEY MAG. PHILLIP J. GREEN NEIL B. PIOCH (P67677) MATTHEW L. TURNER (P48706) KEVIN J. STOOPS (P64371) SOMMERS SCHWARTZ, P.C. One Town Square Suite 1700 Southfield, Michigan 48076 Telephone: (248) 429-9583 Facsimile: (248) 746-4001 npioch@sommerspc.com mturner@sommerspc.com kstoops@sommerspc.com SARAH L. SIMMONS (P74931) LITTLER MENDELSON, P.C. 200 Renaissance Center Suite 3110 Detroit, Michigan 48243 Telephone: (313) 446-6401 Facsimile: (313) 446-6405 slsimmons@littler.com ROBERT ANTHONY ALVAREZ (P66954) AVANTI LAW GROUP, PLLC 600 28th Street SW Wyoming, Michigan 49509 Telephone: (616) 257-6807 Facsimile: (616) 257-8501 ralvarez@avantilaw.com Attorneys for Plaintiff ANDREW J. VOSS LITTLER MENDELSON, P.C. 1300 IDS Center 80 South 8th Street Minneapolis, MN 55402.2136 Telephone: (612) 630-1000 Facsimile: (313) 446-6405 avoss@littler.com Attorneys for Defendant DEFENDANT, THE HUNTINGTON NATIONAL BANK’S PARTIAL MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) Defendant, The Huntington National Bank, through its undersigned counsel, and pursuant to Fed. R. Civ. P. 12(b)(6), moves the Court for an order dismissing Count II - Nationwide Breach of Contract - of Plaintiff’s Complaint. To support its Motion, Defendant relies upon the Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.76 Page 1 of 16 2 accompanying brief and exhibits. Concurrence of Plaintiff’s counsel in the relief sought was requested on January 24, 2017, and concurrence was denied. Hence, it is necessary to present this Motion. WHEREFORE, Defendant respectfully requests that the Court enter an Order dismissing Count II of Plaintiff’s Complaint. LITTLER MENDELSON, P.C. /s/ Sarah L. Simmons Sarah L. Simmons (P74931) 200 Renaissance Center Suite 3110 Detroit, Michigan 48243 Attorneys for Defendant Telephone: (313) 446-6401 Facsimile: (313) 446-6405 slsimmons@littler.com Dated: March 6, 2017 Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.77 Page 2 of 16 THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN ANTON TAYLOR, Plaintiff, vs. THE HUNTINGTON NATIONAL BANK, Defendant. CASE NO. 1:16-cv-01301 HON. PAUL L. MALONEY MAG. PHILLIP J. GREEN NEIL B. PIOCH (P67677) MATTHEW L. TURNER (P48706) KEVIN J. STOOPS (P64371) SOMMERS SCHWARTZ, P.C. One Town Square Suite 1700 Southfield, Michigan 48076 Telephone: (248) 429-9583 Facsimile: (248) 746-4001 npioch@sommerspc.com mturner@sommerspc.com kstoops@sommerspc.com SARAH L. SIMMONS (P74931) LITTLER MENDELSON, P.C. 200 Renaissance Center Suite 3110 Detroit, Michigan 48243 Telephone: (313) 446-6401 Facsimile: (313) 446-6405 slsimmons@littler.com ROBERT ANTHONY ALVAREZ (P66954) AVANTI LAW GROUP, PLLC 600 28th Street SW Wyoming, Michigan 49509 Telephone: (616) 257-6807 Facsimile: (616) 257-8501 ralvarez@avantilaw.com Attorneys for Plaintiff ANDREW J. VOSS LITTLER MENDELSON, P.C. 1300 IDS Center 80 South 8th Street Minneapolis, MN 55402.2136 Telephone: (612) 630-1000 Facsimile: (313) 446-6405 avoss@littler.com Attorneys for Defendant DEFENDANT, THE HUNTINGTON NATIONAL BANK’S BRIEF IN SUPPORT OF ITS PARTIAL MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.78 Page 3 of 16 TABLE OF CONTENTS PAGE i TABLE OF AUTHORITIES .................................................................................................. ii-iii STATEMENT OF ISSUE PRESENTED ..................................................................................... iv CONTROLLING OR MOST APPROPRIATE AUTHORITY .................................................... v I. PLAINTIFF’S ALLEGATIONS ....................................................................................... 1 II. PROCEDURAL HISTORY............................................................................................... 2 III. ARGUMENT ..................................................................................................................... 2 A. The Rule 12(b)(6) Standard ................................................................................... 2 B. Plaintiff Has Not Alleged Facts Sufficient to Show a Legal Entitlement to Relief as to Count II of his Complaint ................................................................... 2 1. There Is No Employment Contract Between Plaintiff and Huntington Bank ........................................................................................ 3 2. Michigan Law Does Not Recognize a Duty of Good Faith and Fair Dealings in At-Will Employment Relationships, Therefore, the Duty Could Not be Breached ..................................................................... 6 IV. CONCLUSION .................................................................................................................. 7 Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.79 Page 4 of 16 ii TABLE OF AUTHORITIES Page(s) Cases Barber v. SMH (US), Inc., 509 N.W.2d 791 (Mich. Ct. App. 1993) ................................................................................v, 7 Dumas v. Auto Club Ins. Ass’n, 473 N.W.2d 652 (Mich. 1991) ...................................................................................................3 Farah v. Federal Nat. Mortg. Ass’n, 13-cv-11787, 2014 WL 1305069 (E.D. Mich. 2014) ...............................................................7 Ford v. Blue Cross & Blue Shield of Michigan, 389 N.W.2d 114 (Mich. Ct. App. 1986) ............................................................................v, 3, 4 Greene v. Standard Register Co., No. 1:91-cv-204, 1992 WL 677502 (W.D. Mich. 1992) ..........................................................4 Hammond v. United of Oakland, Inc., 483 N.W.2d 652 (Mich. Ct. App. 1992) ............................................................................v, 6, 7 Ho v. General Motors Corp., 661 F.Supp. 618 (E.D. Mich. 1987) ...........................................................................................4 Int’l-Matex Tank Terminals-Ill. v. Chemical Bank, No. 1:08-cv-1200, 2009 WL 3270276 (W.D. Mich. 2009) ......................................................7 Kloian v. Domino’s Pizza, LLC, 733 N.W.2d 766 (Mich. Ct. App. 2006) ....................................................................................3 LaCourse v. GRS III LLC, No. 05-73613, 2006 WL 3694623 (E.D. Mich. 2006) ..............................................................3 Lontz v. Continental Cas. Co., No. 281183, 2009 WL 794480 (Mich. Ct. App. 2009) .............................................................3 In re NM Holdings Co. v. Deloitte & Touche LLP, 622 F.3d 613 (6th Cir. 2010) .....................................................................................................2 Rowe v. Montgomery Ward & Co., Inc., 473 N.W.2d 268 (Mich. 1991) ...................................................................................................4 Russell v. Citi, No. 12-16-DLB-JGW, 2012 WL 5947450 (E.D. Ky. 2012) ....................................... iv, 4, 5, 6 Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.80 Page 5 of 16 iii TABLE OF AUTHORITIES (Continued) Page(s) Cases Stromback v. New Line Cinema, No. 01-73898, 2002 WL 31548620 (E.D. Mich. 2002) ............................................................7 Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880 (Mich. 1980) ...............................................................................................v, 3 Statutes FLSA ................................................................................................................................................5 Other Authorities Black’s Law Dictionary 344 (8th ed. 2007).....................................................................................5 Fed. R. Civ. P. 12(b)(6).......................................................................................................... iv, v, 2 Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.81 Page 6 of 16 iv STATEMENT OF ISSUE PRESENTED Should Plaintiff’s claim for Nationwide Breach of Contract (Count II) be dismissed under Fed. R. Civ. P. 12(b)(6) for failing to state a claim upon which relief can be granted because Plaintiff has failed to plead facts sufficient to make the existence of a contract plausible? Defendant’s Answer: Yes. Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.82 Page 7 of 16 v CONTROLLING OR MOST APPROPRIATE AUTHORITY The controlling and most appropriate authority includes: Fed. R. Civ. P. 12(b)(6); Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880 (Mich. 1980); Ford v. Blue Cross & Blue Shield of Michigan, 389 N.W.2d 114 (Mich. Ct. App. 1986); Russell v. Citi, No. 12-16-DLB-JGW, 2012 WL 5947450 (E.D. Ky. 2012); Barber v. SMH (US), Inc., 509 N.W.2d 791 (Mich. Ct. App. 1993), and Hammond v. United of Oakland, Inc., 483 N.W.2d 652 (Mich. Ct. App. 1992). Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.83 Page 8 of 16 BRIEF IN SUPPORT Defendant, The Huntington National Bank (“Huntington Bank” or “Defendant”), submits that Count II of Plaintiff Complaint alleges no cause of action upon which relief may be granted, and therefore, must be dismissed for the below reasons. I. PLAINTIFF’S ALLEGATIONS1 Huntington Bank employed Plaintiff, Anton Taylor (“Plaintiff” or “Taylor”), as an hourly Phone Bank Customer Service Associate (“CSA”) in Holland, Michigan from approximately November 2012 until April 2016. (ECF No. 1, Compl. ¶¶ 21-22.) Taylor typically worked 40 hours per week and was paid an hourly wage of $12.75 when he started and $13.33 per hour at the time of his separation from Huntington Bank. (Compl. ¶¶ 30, 72.) For approximately the last two years of Taylor’s employment, Huntington Bank used timekeeping software called IEX E-Time (“IEX”). (Compl. ¶33, 38.) Taylor would sign into the software by logging into his computer. (Compl. ¶38.) He was considered on the clock for purposes of payroll when he logged into IEX. 2 (Compl. ¶50.) Taylor alleges that it would take 6 to 10 minutes for his computer to boot up if it was shut off upon his arrival, and 4 to 6 minutes to boot up if it was in sleep mode at the time of his arrival. (Compl. ¶¶ 34-35.) Taylor was also required to log out of IEX at lunch and log in when he returned from lunch. (Compl. ¶ 61.) Taylor alleges he worked an average of 15 minutes a day off-the-clock and that Huntington Bank failed to pay him for between 50 and 150 minutes per week. (Compl. ¶¶ 63, 71.) 1 Defendant accepts the allegations in the Complaint, as it must, only for the purposes of this Motion. 2 Note that this is incorrect. The timekeeping system is called E-Time. This is the first operating system a CSA logs into which begins the time clock for purposes of payroll. IEX is a different and separate operating system from E-time that opens a CSA’s telephone line to begin receiving customer calls. IEX also tracks CSAs’ adherence (i.e., how much of the CSA’s time is spent taking telephone calls compared to the target percentage). IEX is not related to the timekeeping records created by E-Time for purposes of payroll. Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.84 Page 9 of 16 2 II. PROCEDURAL HISTORY Plaintiff filed his Complaint against Defendant on or about November 7, 2016. (ECF No. 1 and 4, Summons and Complaint.) On January 5, 2017, Defendant accepted service of Plaintiff’s Complaint, which alleges a cause of action for Failure to Pay Overtime (Count I), and Nationwide Breach of Contract (Count II). (Waiver of the Service of Summons Ex 1; Compl. ¶¶ 116-137.) III. ARGUMENT A. The Rule 12(b)(6) Standard. Rule 12(b)(6) provides that the Court may dismiss a pleading for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6). When deciding a motion brought under Rule 12(b)(6), a court “must construe the complaint in the light most favorable to the plaintiff and must accept all of the factual allegations contained in the complaint as true.” In re NM Holdings Co. v. Deloitte & Touche LLP, 622 F.3d 613, 618 (6th Cir. 2010), citing Lambert v. Hartman, 517 F.3d 433, 439 (6th Cir. 2008). “The complaint must show legal entitlement to relief in order to survive a Rule 12(b)(6) motion to dismiss.” Id., citing Lambert, 517 F.3d at 439. “This standard is met where the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.’” Id., quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007). B. Plaintiff Has Not Alleged Facts Sufficient to Show a Legal Entitlement to Relief as to Count II of his Complaint. Plaintiff asserts his Nationwide Breach of Contract claim based on the premise that an employment contract was formed because he agreed to work for Defendant, and Defendant agreed to pay him at an established rate, which is evidenced by his pay-stub. (Compl. ¶¶ 129- 132.) According to Plaintiff’s theory, Defendant breached this agreement because it was Defendant’s duty of Good Faith and Fair Dealing to track Plaintiff’s “off-the-clock” time and Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.85 Page 10 of 16 3 pay him for it, which Defendant failed to do. (Compl. ¶¶ 133, 135.) This claim fails because there is no employment contract between Plaintiff and Defendant, nor is there a breach because Michigan recognizes no duty of good faith and fair dealing in employment relationships. 1. There Is No Employment Contract Between Plaintiff and Huntington Bank. The formation of “a contract requires mutual assent or a meeting of the minds on all the [material or] essential terms.” Kloian v. Domino’s Pizza, LLC, 733 N.W.2d 766, 770 (Mich. Ct. App. 2006). Under Michigan law a meeting of the minds is also required to modify a contract, i.e., one party cannot unilaterally alter an existing bilateral agreement. Lontz v. Continental Cas. Co., No. 281183, 2009 WL 794480 (Mich. Ct. App. 2009) (Ex 2). A plaintiff asserting a breach of contract claim, based upon his employment relationship, must prove the relevant contractual terms by pointing to: (1) an express contract provision; (2) an express agreement, written or oral, that is clear and unequivocal; or (3) “a contractual provision, implied at law, where an employer’s policies and procedures instill a ‘legitimate expectation.’” Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880, 885 (Mich. 1980); Ford v. Blue Cross & Blue Shield of Michigan, 389 N.W.2d 114, 115 (Mich. Ct. App. 1986). 3 Where there is no express promise, any contractual right must “spring from the ‘legitimate expectations’ leg of Toussaint.” Dumas v. Auto Club Ins. Ass’n, 473 N.W.2d 652, 655 (Mich. 1991). The Michigan Supreme Court has squarely held, however, that the “legitimate expectation” doctrine is not available in failure to pay cases. Dumas, 473 N.W.2d at 655 (“We choose not to extend the ‘legitimate expectations’ cause of action to [disputes to cover an employer’s compensation policy]”); LaCourse v. GRS III LLC, No. 05-73613, 2006 WL 3694623 (E.D. Mich. 2006) (Ex 3) (The “legitimate expectations” “method of proving an 3 Generally plaintiffs seek to invoke this test to argue just cause only termination contracts. Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.86 Page 11 of 16 4 employment contract is not available in a failure to pay case”). Plaintiff has not alleged the existence of a written employment contract with Huntington Bank, and none existed. He can point to no express written provision to support his claim that Huntington Bank promised him something that he did not receive. Since the “legitimate expectation” test is unavailable in a failure to pay scenario, Plaintiff can only base his claim on the contention that an implied-in-fact contract was formed between the parties, as a result of their employment relationship. An implied-in-fact contract exists when “according to ordinary course of dealing and common understanding of men, show a mutual intention to contract.” Ho v. General Motors Corp., 661 F.Supp. 618, 619 (E.D. Mich. 1987). It is not an anticipated contract, but “rather a true contract requiring both mutual assent and definite terms” which is evidenced by the circumstances, conduct and actions of the parties.” Russell v. Citi, No. 12-16-DLB-JGW, 2012 WL 5947450 (E.D. Ky. 2012) (Ex 4) (internal quotations omitted). “[A] mere subjective expectancy on the part of an employee will not create such a legitimate claim.” Ford, 389 N.W.2d at 115. There is a higher evidentiary standard necessary to rely on an implied-in-fact contract: [A]n employee who seeks to establish from conduct a promise implied in fact must meet a higher standard than an employee who relied on express language. Logic compels the conclusion that where parties expressly negotiate with offers and counteroffers, it is more reasonable to anticipate mutual assent. Conversely, there is less chance that the parties desired or intended the result prayed for where . . . conduct and oral statements are claimed to create a promise . . . implied in fact. Rowe v. Montgomery Ward & Co., Inc., 473 N.W.2d 268, 275 (Mich. 1991) (Rowe also stating that the higher standard requires the oral statements be clear and unequivocal to result in a meeting of the minds); see also, Greene v. Standard Register Co., No. 1:91-cv-204, 1992 WL Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.87 Page 12 of 16 5 677502 (W.D. Mich. 1992) (Ex 5) (work rules and procedures do not create an implied contract); Russell, supra (an implied-in-fact contract requires clear and convincing mutual assent that is positively definite and mutually understood and the parties must agree on all material and essential terms and conditions, leaving nothing to be agreed upon later; if one essential term is not agreed upon, there is no contract). Plaintiff purports to allege a plausible breach of contract claim with only his pay-stubs, which state his current rate of pay. He further infers that the terms of the contract are established because Defendant has a legal requirement under the FLSA to pay Plaintiff for all hours worked. But Congress has provided a remedy for an alleged violation of the FLSA. These types of allegations cannot conceivably establish an employment contract between the parties, and certainly does not establish clear and convincing mutual assent, even at the pleading stage, to engage in a contractual relationship. To begin, the alleged contract does not contain the material or essential terms for an employment contract, as it fails to address anything except Plaintiff’s hourly wage, leaving all other terms unclear. 4 Next, there is no mutuality as required by Michigan law. Defendant is free to unilaterally change Plaintiff’s terms and conditions of employment, including his rate of pay at its sole discretion. This is apparent in Plaintiff’s change to his hourly rate throughout his employment, which was not a result of mutual negotiations. Plaintiff has not asserted even basic allegations that would establish there was a clear and unequivocal meeting of the minds sufficient to form a contract. Plaintiff’s argument here was considered and squarely rejected by the court in Russell v. Citi, supra. In Russell, the plaintiff worked at a call center and, just as in this case, alleged he was owed lost wages due to computer login delays. Id. Among his claims, plaintiff included 4 An employment contract is “a contract between an employer and employee in which the terms and conditions of employment are stated.” Black’s Law Dictionary 344 (8th ed. 2007). Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.88 Page 13 of 16 6 breach of implied contract. Id. Plaintiff asserted that he contracted to work in exchange for payment for all hours worked, including off-the-clock time, which was evidenced by “pay-stubs, the nature of [plaintiff’s] employment, other circumstances surrounding the parties’ employment relationship, and the situation and objective of Citi as an employer.” Id. at *3 (internal citations omitted). The employer filed a 12(b)(6) motion to dismiss the contract claim. The court agreed with the employer, stating: [Plaintiff’s] vague allegations are not evidence of a contract. If they were, all employees would have an implied contract with their employer. As this Court has explained, implied-in-fact contracts require more than just payment for services. An implied-in-fact contract requires stricter proof . . . than to establish ordinary contracts-more than proof of performance of the services and casual, indefinite expressions of an intention to pay for same . . . Simply stated, Plaintiff’s pay stubs do not constitute a contract. Id. at *3. Russell is persuasive here. Plaintiff makes the same claim based upon the same evidence, or lack thereof. Just as in Russell, Taylor must present something more than his pay-stubs to establish an implied contract. He has not pleaded facts sufficient to make his claim plausible, and therefore, it must be dismissed. 2. Michigan Law Does Not Recognize a Duty of Good Faith and Fair Dealings in At-Will Employment Relationships, Therefore, the Duty Could Not be Breached. Plaintiff also claims Defendant breached the employment contract by failing to keep track of time Plaintiff spent performing off-the-clock activities, in violation of its “duty of good faith and fair dealing.” “[T]he covenant of good faith and fair dealing is an implied promise contained in every contract ‘that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’” Hammond v. United of Oakland, Inc., 483 N.W.2d 652, 655 (Mich. Ct. App. 1992). The duty cannot override the Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.89 Page 14 of 16 7 express terms of a contract and cannot form a claim independent of the contract. Int’l-Matex Tank Terminals-Ill. v. Chemical Bank, No. 1:08-cv-1200, 2009 WL 3270276 (W.D. Mich. 2009) (Ex 6). For the implied duty of good faith and fair dealing to exist, there must be an “actual, valid contract.” Stromback v. New Line Cinema, No. 01-73898, 2002 WL 31548620 (E.D. Mich. 2002) (Ex 7) (Plaintiff cannot assert a claim under the duty in a quasi-contract); Farah v. Federal Nat. Mortg. Ass’n, 13-cv-11787, 2014 WL 1305069 (E.D. Mich. 2014) (Ex 8) (the duty does not apply to negotiations to modify a contract). Plaintiff has not alleged the existence of a written contract between the parties here, because no contract existed. Therefore, a duty of good faith and fair dealings cannot exist. Even assuming there is an implied contract, this is not sufficient to invoke the duty because it is non-sensical to assert that that there is an implied duty to an entirely implied contract. Under this reasoning, a party could assert an entire array of implied terms. Likewise, if the implied duty cannot override an express contract term, it follows that there must first be an express contract. See, Int’l Matex Tank Terminal, supra. Even if the Court is inclined to find a contract, Plaintiff’s assertion of this duty as a basis for his breach of that contract still fails because Michigan recognizes no cause of action for breach of an implied covenant of good faith and fair dealing in the employment context. Barber v. SMH (US), Inc., 509 N.W.2d 791, 795 (Mich.Ct.App. 1993); Hammond, 483 N.W.2d at 655 (“The Court has been unwilling to recognize a cause of action for breach of implied covenant of good faith and fair dealing in cases involving at-will employment relationships). Since Plaintiff was an at-will employee, any claim of breach of contract dependent on the duty of good faith and fair dealing lacks a legal basis and therefore, no relief can be granted. IV. CONCLUSION For all of the foregoing reasons, Defendant respectfully requests that the Court enter an Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.90 Page 15 of 16 8 Order granting its Partial Motion to Dismiss Count II of Plaintiff’s Complaint. LITTLER MENDELSON PLC /s/ Sarah L. Simmons Sarah L. Simmons (P74931) 200 Renaissance Center Suite 3110 Detroit, Michigan 48243 Attorneys for Defendant Telephone: (313) 446-6401 Facsimile: (313) 446-6405 slsimmons@littler.com Dated: March 6, 2017 CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing document was served upon all parties and/or attorneys of record to the above cause herein at their respective addresses as disclosed on the pleadings on March 6, 2017, via: U. S. Mail Facsimile X ECF Filing Hand Delivery E-Mail Federal Express /s/ Sarah L. Simmons Sarah L. Simmons Case 1:16-cv-01301-PLM-PJG ECF No. 9 filed 03/06/17 PageID.91 Page 16 of 16 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MICHIGAN ANTON TAYLOR, Plaintiff, vs. THE HUNTINGTON NATIONAL BANK, Defendant. CASE NO. 1:16-cv-01301 HON. PAUL L. MALONEY MAG. PHILLIP J. GREEN NEIL B. PIOCH (P67677) MATTHEW L. TURNER (P48706) KEVIN J. STOOPS (P64371) SOMMERS SCHWARTZ, P.C. One Town Square Suite 1700 Southfield, Michigan 48076 Telephone: (248) 429-9583 Facsimile: (248) 746-4001 npioch@sommerspc.com mturner@sommerspc.com kstoops@sommerspc.com SARAH L. SIMMONS (P74931) LITTLER MENDELSON, P.C. 200 Renaissance Center Suite 3110 Detroit, Michigan 48243 Telephone: (313) 446-6401 Facsimile: (313) 446-6405 slsimmons@littler.com ROBERT ANTHONY ALVAREZ (P66954) VICTORIA LYNN SMALLEY (P80179) AVANTI LAW GROUP, PLLC 600 28th Street SW Wyoming, Michigan 49509 Telephone: (616) 257-6807 Facsimile: (616) 257-8501 ralvarez@avantilaw.com vsmalley@avantilaw.com Attorneys for Plaintiff ANDREW J. VOSS LITTLER MENDELSON, P.C. 1300 IDS Center 80 South 8th Street Minneapolis, MN 55402.2136 Telephone: (612) 630-1000 Facsimile: (313) 446-6405 avoss@littler.com Attorneys for Defendant INDEX OF EXHIBITS OF DEFENDANT, THE HUNTINGTON NATIONAL BANK'S, PARTIAL MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(B)(6) 1. Waiver of Service of Summons. 2. Lontz v. Continental Cas. Co., No. 281183, 2009 WL 794480 (Mich. Ct. App. 2009). Case 1:16-cv-01301-PLM-PJG ECF No. 9-1 filed 03/06/17 PageID.92 Page 1 of 2 2 3. LaCourse v. GRS III LLC, No. 05-73613, 2006 WL 3694623 (E.D. Mich. 2006). 4, Russell v. Citi, No. 12-16-DLB-JGW, 2012 WL 5947450 (E.D. Ky. 2012). 5. Greene v. Standard Register Co., No. 1:91-cv-204, 1992 WL 677502 (W.D. Mich. 1992). 6. Int’l-Matex Tank Terminals-Ill. v. Chemical Bank, No. 1:08-cv-1200, 2009 WL 3270276 (W.D. Mich. 2009). 7. Stromback v. New Line Cinema, No. 01-73898, 2002 WL 31548620 (E.D. Mich. 2002). 8. Farah v. Federal Nat. Mortg. Ass’n, 13-cv-11787, 2014 WL 1305069 (E.D. Mich. 2014). Case 1:16-cv-01301-PLM-PJG ECF No. 9-1 filed 03/06/17 PageID.93 Page 2 of 2 Exhibit 1 Case 1:16-cv-01301-PLM-PJG ECF No. 9-2 filed 03/06/17 PageID.94 Page 1 of 2 Case 1:16-cv-01301-PLM-PJG ECF No. 6 filed 01/05/17 PageID.42 Page 1 of 1Case 1:16-cv-01301-PLM-PJG ECF No. 9-2 filed 03/06/17 PageID.95 Page 2 of 2 Exhibit 2 Case 1:16-cv-01301-PLM-PJG ECF No. 9-3 filed 03/06/17 PageID.96 Page 1 of 5 Lontz v. Continental Cas. Co., Not Reported in N.W.2d (2009) 2009 WL 794480 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2009 WL 794480 Only the Westlaw citation is currently available. UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING. UNPUBLISHED Court of Appeals of Michigan. James K. LONTZ and Brigitte Lontz, Plaintiffs-Appellants, v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellees. Docket No. 281183. | March 26, 2009. West KeySummary 1 Insurance Conversion An insurance company was entitled to summary disposition on a breach of contract action brought by an insured. The insured held a non-tax qualifying (NTQ) long-term care insurance policy and alleged that the insurer had breached its contract when it erroneously refused, for a six-week period, to honor policyholders' exchange privileges that allowed NTQ policyholders to exchange their policies for tax-qualifying (TQ) policies. However, the insured never attempted to make an exchange and thereby failed to offer evidence that it suffered an injury in fact and thus had no standing to bring the breach of contract action. Cases that cite this headnote Wayne Circuit Court; LC No. 04-425621-CZ. Before: JANSEN, P.J., and METER and FORT HOOD, JJ. Opinion PER CURIAM. *1 In this contract dispute, plaintiffs appeal by right the trial court's grant of summary disposition in favor of defendant. We affirm. Defendant began selling both non-tax-qualifying (NTQ) and tax-qualifying (TQ) longterm care insurance policies to consumers in 1997. Plaintiffs purchased NTQ policies from defendant. Plaintiffs acknowledged that their NTQ policies did not qualify for favorable income tax treatment under the law in effect at the time they were purchased. However, the NTQ policies contained an “exchange privilege,” which provided: We are currently working with your state insurance department to obtain approval of long-term care policies that will qualify for this favorable tax treatment. Once this approval has been received, you may exchange this policy for a new tax qualified policy without having to provide new evidence of insurability. This exchange privilege effectively permitted the holders of NTQ policies to exchange their policies for TQ policies. In 2003, defendant stopped selling long-term care insurance policies. According to the deposition testimony of defendant's vice president, certain of defendant's agents or representatives mistakenly concluded in December 2003 that the exchange privilege could no longer be honored because of the decision to discontinue selling the policies. Defendant's vice president attributed this mistake to a number of things, including mistaken verbal communications and a misunderstanding of a written bulletin that was sent out to field agents. Defendant's erroneous refusal to honor the policyholders' exchange privileges lasted for approximately six weeks. Plaintiffs never attempted to invoke the exchange privilege and never indicated a desire to convert their NTQ policies into TQ policies during the abovementioned six- week period. Nevertheless, plaintiffs sued, alleging among other things that defendant had breached the insurance contracts by temporarily refusing to honor the exchange privilege. Plaintiffs sought not only traditional contract Case 1:16-cv-01301-PLM-PJG ECF No. 9-3 filed 03/06/17 PageID.97 Page 2 of 5 Lontz v. Continental Cas. Co., Not Reported in N.W.2d (2009) 2009 WL 794480 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 remedies, but also a declaration that defendant should “cease violating the law” and “allow [plaintiffs] to exercise the ‘[e]xchange [p]rivilege’ as initially set forth in the insurance contracts.” The trial court dismissed plaintiffs' claims on the basis of the doctrines of standing and ripeness. The trial court did not specify the court rule on which it relied to dismiss plaintiffs' breach of contract claim. But a motion to dismiss for lack of standing is generally brought pursuant to MCR 2.116(C)(5). Aichele v. Hodge, 259 Mich.App. 146, 152 n. 2, 673 N.W.2d 452 (2003); Dep't of Social Services v. Baayoun, 204 Mich.App. 170, 173, 514 N.W.2d 522 (1994). “ ‘In reviewing a motion for summary disposition pursuant to MCR 2.116(C) (5), this Court must consider the pleadings, depositions, admissions, affidavits, and other documentary evidence submitted by the parties.’ “ Aichele, 259 Mich.App. at 152, 673 N.W.2d 452, quoting Jones v. Slick, 242 Mich.App. 715, 718, 619 N.W.2d 733 (2000). “This Court reviews the trial court's ruling de novo and examines the entire record to determine whether the defendant is entitled to judgment as a matter of law.” Jones, 242 Mich.App. at 718, 619 N.W.2d 733. 1 *2 The doctrine of standing deals with the plaintiff's interest in the litigation and “ensures that a genuine case or controversy is before the court.” Michigan Citizens for Water Conservation v. Nestle Waters North America, Inc., 479 Mich. 280, 294, 737 N.W.2d 447 (2007). Standing is evaluated at the time the plaintiff seeks relief from the trial court. Altman v. Nelson, 197 Mich.App. 467, 475, 495 N.W.2d 826 (1992). Our Supreme Court has adopted a three-part test to establish standing: “ ‘[F]irst, the plaintiff must have suffered an “injury in fact”-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical.’ “ Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be “fairly ... traceable to the challenged action of the defendant, and not ... the result [of] the independent action of some third party not before the court.” Third, it must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.” ‘ “ [Lee v. Macomb Co. Bd. of Comm'rs, 464 Mich. 726, 739, 629 N.W.2d 900 (2001) (citations omitted).] In this case, plaintiffs' failure to offer evidence that they suffered an injury in fact is fatal to their standing to pursue a breach of contract action. Michigan law requires that a party claiming a breach of contract prove the terms of the contract, that the defendant breached the terms, and that the breach caused an injury. See In re Brown, 342 F.3d 620, 628 (C.A.6, 2003); see also Alan Custom Homes, Inc. v. Krol, 256 Mich.App. 505, 512, 667 N.W.2d 379 (2003). Plaintiffs assert that the exchange privilege offered by defendant in 1997, which provided plaintiffs the opportunity to exchange their NTQ policies for TQ policies, constituted a term of the parties' contract. But even if it did, we cannot agree that the unilateral action taken by defendant in 2003 to temporarily suspend or terminate the exchange privilege resulted in a concrete and particularized injury. In Michigan a contract modification requires a meeting of the minds in the same way that a meeting of the minds is necessary to create a binding contract in the first instance. Port Huron Ed. Ass'n v. Port Huron Area School Dist., 452 Mich. 309, 326-327, 550 N.W.2d 228 (1996). “[T]he freedom to contract does not authorize a party to unilaterally alter an existing bilateral agreement.” Quality Products & Concepts Co. v. Nagel Precision, Inc., 469 Mich. 362, 372, 666 N.W.2d 251 (2003) (emphasis in original). Therefore, we find no merit to plaintiffs' claim of injury predicated on defendant's alleged unilateral action. Because defendant's unilateral action could not have altered the contract term as a matter of law, the value of the contract could not have been affected by defendant's unilateral conduct. We also reject plaintiffs' reliance on the doctrine of anticipatory repudiation to establish an injury. Although plaintiffs failed to present this specific argument to the trial court, we consider it because it is an issue of law for which the necessary facts have been presented. Steward v. Panek, 251 Mich.App. 546, 554, 652 N.W.2d 232 (2002). Case 1:16-cv-01301-PLM-PJG ECF No. 9-3 filed 03/06/17 PageID.98 Page 3 of 5 Lontz v. Continental Cas. Co., Not Reported in N.W.2d (2009) 2009 WL 794480 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 *3 Nonetheless, the doctrine does not aid plaintiffs in establishing an injury in this case. Under the doctrine of anticipatory repudiation, [I]f, before the time of performance, a party to a contract unequivocally declares the intent not to perform, the innocent party has the option to either sue immediately for the breach of contract or wait until the time of performance. [Stoddard v. Manufacturers Nat'l Bank, 234 Mich.App. 140, 163, 593 N.W.2d 630 (1999).] Also under the doctrine of anticipatory repudiation, one party's breach can excuse the innocent party's obligation to perform. Thomas Canning Co. v. Johnson, 212 Mich. 243, 252, 180 N.W. 391 (1920); see also 17A Am Jur 2d, Contracts, § 688, p 648. Moreover, “[i]t is well settled that a repudiation of the contract by one party relieves the nonrepudiating party of the duty to perform any conditions precedent that may exist to the performance of the repudiating party.” 13 Williston, Contracts (4th ed), § 39:39, p 672. However, even assuming arguendo that defendant breached the contract and that this breach relieved plaintiffs of their obligation to notify defendant of their intent to invoke the exchange privilege, the submitted evidence examined in a light most favorable to plaintiffs failed to establish that plaintiffs had ever articulated a past or present intention to exercise the exchange privilege in the first instance. Given this absence of evidence, coupled with the complete lack of evidence that defendant ever specifically indicated that it would not honor such a request by plaintiffs, the doctrine of anticipatory breach does not assist plaintiffs in establishing an injury in this case. Plaintiffs failed to show a genuine issue of material fact regarding their standing to bring a breach of contract action against defendant. Accordingly, the trial court properly dismissed this claim. Plaintiffs' claim also embodied a request for declaratory relief, requesting that the trial court declare that defendant was prohibited from unilaterally changing the insurance policies to eliminate the exchange privilege. However, we are not persuaded that plaintiffs have demonstrated any basis for disturbing the trial court's decision to dismiss the claim for declaratory relief. MCR 2.605 governs a trial court's power to enter a declaratory judgment. The court rule provides in part that “[i]n a case of actual controversy within its jurisdiction, a Michigan court of record may declare the rights and other legal relations of an interested party seeking a declaratory judgment, whether or not other relief is or could be sought or granted.” MCR 2.605(A)(1). Because the language in this rule is permissive, the decision whether to grant declaratory relief is within the trial court's sound discretion. PT Today, Inc. v. Comm'r of Financial & Ins. Services, 270 Mich.App. 110, 126, 715 N.W.2d 398 (2006). But “the existence of an ‘actual controversy’ is a condition precedent to the invocation of declaratory relief.” Id. at 127, 715 N.W.2d 398. The requirements of an “actual controversy” and an “interested party” in MCR 2.605 “incorporat[e] traditional restrictions on justiciability such as standing, ripeness, and mootness.” Associated Builders & Contractors v. Dep't of Consumer & Industry Services, 472 Mich. 117, 125, 693 N.W.2d 374 (2005). *4 We agree with the trial court's decision to dismiss plaintiffs' request for declaratory relief on the basis of the doctrine of ripeness. Because plaintiffs' breach of contract claim rested on speculative and contingent future events-namely, defendant's hypothetical refusal to honor the exchange privilege upon plaintiffs' invocation of the privilege, which may never have occurred-it was not ripe for declaratory relief. Huntington Woods v. Detroit, 279 Mich.App. 603, 615-616, 761 N.W.2d 127; --- NW2d ---- (2008). We note that whether defendant had breached the exchange privilege presented a distinct question from whether the exchange privilege was, in fact, a term of plaintiffs' contracts. Moreover, it is true that declaratory relief has been found appropriate where it will “ ‘serve some practical end in quieting or stabilizing an uncertain or disputed jural relation either as to present or prospective obligations.’ “ Flint v. Consumers Power Co., 290 Mich. 305, 310, 287 N.W. 475 (1939) (citation omitted). However, while a court is not bound by a parties' choice of labels, Johnston v. City of Livonia, 177 Mich.App. 200, 208, 441 N.W.2d 41 (1989), the record supports the trial Case 1:16-cv-01301-PLM-PJG ECF No. 9-3 filed 03/06/17 PageID.99 Page 4 of 5 Lontz v. Continental Cas. Co., Not Reported in N.W.2d (2009) 2009 WL 794480 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 court's determination that plaintiffs sought declaratory relief with respect to the breach of contract claim only, and not with respect to the separate and distinct issue of whether the exchange privilege constituted a contract term. Indeed, given that the parties had agreed that plaintiffs had a contractual right to exercise the exchange privilege, any dispute concerning whether the exchange privilege constituted a term of plaintiffs' contracts was moot. A court will not reach moot issues or declare principles or rules of law that have no practical effect in a case, unless the issue is one of public significance that is likely to recur yet evade judicial review. Federated Publications, Inc. v. Lansing, 467 Mich. 98, 112, 649 N.W.2d 383 (2002), clarified in part on other grounds Herald Co. v. Eastern Michigan Univ. Bd. of Regents, 475 Mich. 463, 470-472, 719 N.W.2d 19 (2006). Plaintiffs have not established that the issue of whether the exchange privilege constituted a contract term is likely to recur yet evade judicial review. We will not disturb the trial court's decision when the court has reached the correct result. Taylor v. Laban, 241 Mich.App. 449, 458, 616 N.W.2d 229 (2000). The substance of plaintiffs' request for declaratory relief related to their breach of contract claim, and any dispute over whether plaintiffs' insurance policies contained an exchange privilege term was moot. Moreover, plaintiffs' claims were not ripe for judicial review because they rested on contingent future events that might have never occurred. Therefore, plaintiffs failed to establish the requisite actual controversy to obtain declaratory relief in this case. The trial court reached the correct result by dismissing plaintiffs' claim in this regard. Finally, we reject plaintiffs' newly raised argument that summary disposition was premature because discovery was incomplete. “Although incomplete discovery generally precludes summary disposition, summary disposition may nevertheless be appropriate if there is no disputed issue before the court or if further discovery does not stand a fair chance of finding factual support for the nonmoving party.” VanVorous v. Burmeister, 262 Mich.App. 467, 476-477, 687 N.W.2d 132 (2004). Michigan's discovery rules do not allow for “ ‘fishing expedition[s].’ “ Id. at 477, 687 N.W.2d 132 (citation omitted). A party opposing summary disposition on the basis of incomplete discovery must comply with the requirements in MCR 2.116(H) by presenting affidavits to support its position. Coblentz v. Novi, 475 Mich. 558, 570-571, 719 N.W.2d 73 (2006). Because plaintiffs failed to offer the necessary affidavits to show that their position would be supported by additional discovery, they may not now complain that summary disposition under MCR 2.116(C)(10) was premature. Coblentz, 475 Mich. at 571, 719 N.W.2d 73. *5 Having concluded that the trial court reached the correct result by dismissing plaintiffs' claims, we need not consider the remaining arguments raised on appeal. Affirmed. All Citations Not Reported in N.W.2d, 2009 WL 794480 Footnotes 1 We acknowledge that the Supreme Court has differed with this Court concerning the applicability of MCR 2.116(C)(5) in the context of standing to sue. Leite v. Dow Chemical Co., 439 Mich. 920, 478 N.W.2d 892 (1992). However, even assuming that the trial court's grant of summary disposition in this case should be reviewed under MCR 2.116(C)(10), id., the standard applicable to motions brought under subrule (C)(10) is substantially similar to the standard applicable to motions brought under subrule (C)(5). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-3 filed 03/06/17 PageID.100 Page 5 of 5 Exhibit 3 Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.101 Page 1 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2006 WL 3694623 Only the Westlaw citation is currently available. United States District Court, E.D. Michigan, Southern Division. Lawrence K. LaCOURSE, Plaintiff, v. GRS III L.L.C. d/b/a Gonzalez Contract Services, Raytheon Company d/b/a Raytheon, and Graham Jackson, Defendants. No. 05-73613. | Dec. 13, 2006. Attorneys and Law Firms Philip J. Dwyer, East Lansing, MI, for Plaintiff. Russell F. Ethridge, St. Clair Shores, MI, Raymond J. Carey, Foley & Lardner, Detroit, MI, for Defendants. OPINION AND ORDER GRANTING RAYTHEON AND JACKSON'S MOTION FOR SUMMARY JUDGMENT AND GRANTING IN PART AND DENYING IN PART GONZALEZ'S MOTION FOR SUMMARY JUDGMENT DAVID M. LAWSON, United States District Judge. *1 The plaintiff filed his complaint in Oakland County Circuit Court on August 26, 2005 against the defendants alleging, among other things, violations of the Fair Labor Standards Act. State law claims also were alleged. The defendants removed the case to this Court on September 20, 2005, and thereafter they filed motions for summary judgment. Defendant GRS III, L.L.C., doing business as Gonzalez Contract Services (Gonzalez), argues that the plaintiff is exempt from the FLSA, and it attacks the other claims on grounds discussed below. Defendants Raytheon Company and Graham Jackson make those same arguments, and in addition they argue that they were not employers for purposes of the FLSA. The Court heard oral argument on the motions on November 21, 2006. The Court now finds as to defendants Raytheon and Jackson that the undisputed evidence establishes that the plaintiff is an exempt employee, and therefore their motion for summary judgment will be granted. However, because defendant Gonzalez inexplicably admitted in its answer that the plaintiff is an hourly employee, Gonzalez is bound by that admission, and an employee cannot be exempt if he is not paid on a salary basis. Therefore, the Court will deny Gonzalez's motion for summary judgment on the FLSA count, but grant it on the remaining counts because Gonzalez is entitled to judgment on those claims as a matter of law. I. The plaintiff is a training consultant who works as a contract employee to develop manufacturing and repair methods and systems on new products for automotive manufacturers. Although it appears that the plaintiff maintained essentially the same job throughout the period at issue in this lawsuit, his employment history is somewhat complicated due to the changes in relationships between the manufacturer and the contracting companies that actually employed the plaintiff. The plaintiff's actual hours worked typically varied from week to week, and the facts establish that during many weeks he work more than forty hours. He contends that throughout his employment, he was paid on an hourly basis, and he was not compensated by the defendants at time-and-a-half for the hours in excess of forty as required by section 207 of the FLSA, 29 U.S.C. § 207(a)(1). The plaintiff was a contract worker who generally performed his services at automotive manufacturing plants. General Motors Corporation and other car makers employ “end of the line” repair technicians who repair defective or malfunctioning products. The General Motors employees making the repairs are hourly employees and union members. General Motors provides these workers with training on the latest product features, the problems those features may generate, methods for diagnosing those problems, and the appropriate protocols for repairing them. According to the defendants, General Motors contracted with defendant Raytheon Professional Services, L.L.C., to develop those protocols and provide that plant training. Raytheon in turn contracted with employment firms, like defendant Gonzalez, or Cosworth Engineering, to supply the plant training consultants. The employment firm would assign the consultants to particular General Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.102 Page 2 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Motors plants. The plaintiff, who had studied industrial design and fine art for three years at the Center for Creative Studies, was hired in 1992 as a plant training consultant by Cosworth Engineering, who is not a party to this suit. Cosworth assigned the plaintiff to a Ford facility until March 1997, when the plaintiff was asked to work at a General Motors facility. He started at the General Motors plant on March 3, 1997 doing similar work as at Ford. The plaintiff also had a desk at Raytheon's office. Graham Jackson, a Raytheon supervisor to whom the plaintiff reported, testified that the plaintiff was not a Raytheon employee. *2 The plaintiff avers that as a Cosworth employee at Ford, he was always paid by the hour and received an overtime premium. He says that when he moved to the General Motors plant, Mike Pryce, a Cosworth employee, and Jean Hart and Bob Martin, General Motors employees, agreed to a compensatory time system “for excessive hours worked.” “Comp time in that situation meant the trainers could take time off instead of overtime pay. Excessive hours were determined to be anything over forty (40) hours per week.” Pl.'s Resp. Br. Ex. 1, LaCourse Aff. at 6. According to the plaintiff, “[t]he same comp agreement when I went over to General Motors was an agreement, that created banked time to be used same as cash.” Id. at 7. Apparently, the plaintiff no longer received pay premiums for overtime; but he claims that there were no limitations on the use of comp time, as long as it did not interfere with his job. The plaintiff says that all the plant trainers used comp time. The plaintiff states that Graham Jackson was aware of this arrangement, and he previously had used it himself when he was a plant trainer. The plaintiff acknowledges that while at Ford and for the beginning of his tenure at the General Motors plant, he was paid his wages by Cosworth, not General Motors or Raytheon. He testified: Q. And I guess it's true that much like when you were doing the Ford work, you continued to receive your paycheck from Cosworth after you transitioned? A. That's correct. Q. In other words, before that, you didn't get a Ford paycheck, you got a Cosworth paycheck? A. That's correct. ... Q. But between January and February of 1997 when you said that you started the General Motors responsibilities, from that time period through whatever the time or date was when you transitioned to Gonzalez, you remained a Cosworth employee? A. Correct. Q. And then paid salary by Cosworth throughout that period of time, ′97 through 2004? A. My checks came from Cosworth, yes. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 99, 102-03. However, the plaintiff states his paychecks were always the same amount because if he worked less than forty hours, he used comp time to make up the difference. The plaintiff also testified that he kept and submitted weekly time sheets while under Cosworth's employ. He says that the purpose of the time sheets was to record “[w]hat I did, where I was at, my hours had to be turned in every week, my vacation time, which they called no fault hours, sick time, because I got sick time and vacation time; they were very generous with that at Cosworth.” Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 165. Defendant Jackson testified, however, that neither Cosworth nor Raytheon ever had time sheet forms: Q. So you never saw any of his time sheets from Cosworth? A. No. And in fact, it should be on the record that the time sheets from Cosworth, if there are any, were created-a sole document created by Larry LaCourse that never existed from Cosworth. *3 Q. From Cosworth? A. Cosworth never had a time sheet process. Larry invented one on his own. ... Q. Raytheon had no time sheets for Larry; is that correct? A. Raytheon's never had a time sheet for Larry. Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.103 Page 3 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Def. Raytheon's Mot. Summ. J. Ex. 2, Jackson Dep. at 28-29, 33. At some point, the plaintiff claims that he was instructed by a Raytheon employee to stop submitting time cards claiming comp time. He stated in his affidavit: It was customary as set forth in my deposition to always turn in a time sheet to Cosworth, and a copy was left for Raytheon or General Motors, or Jackson, as provided. Later on, Kathleen LaSalle, who was working at Raytheon, who was Jackson's boss, directed through her assistant to me, that she (Kathleen) or Jackson had to sign the time sheets that I was turning in. And, then it was at that point that Kathleen LaSalle through her assistant, indicated to me not to show the comp time hours, and then after that not to show the banked hours, and then after that, not to show the B hours, because she knew Raytheon may be liable for the overtime. So, I understood that she did not want them to be shown on the time slips. She did not say not to work those hours. She did not say those would not be comp hours. She just did not want the comp time to show up on the time slips because that would make Raytheon responsible for the comp time. Pl.'s Resp. Ex. 1, LaCourse Aff. at 12. In early 2004, Raytheon Professional Services had a dispute with Cosworth and decided to stop contracting with that company and work with defendant Gonzalez instead. The plaintiff testified that Graham Jackson, on behalf of Raytheon, talked to him about working for Gonzalez: A. Actually, it was all done through Graham Jackson. Q. Well, what do you recall about what happened? A. Well, he said, I'm trying to find you something as close to Cosworth benefits as possible. He goes, I've already checked with this company, this company, this company, this company, he says, from what I can tell you, he said, it looks like Gonzalez will be your best choice. He says, I know they're not going to be as good as-they're not going to have the benefits like Cosworth did, because I had great benefits there. He says, but I'll make up the difference, he says whatever, because we want you to stay here, you made a big decision to stick with us here at plant training, me, and he goes Kathleen LaSalle and all the people above really want you to stay here, so we really appreciate it. I'm going to make it right for you, we're going to look out for you. So you go ahead and go with Gonzalez, because he said he felt that they were the best of what was out there at the time. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 181. Graham Jackson, who works for Raytheon, asked David Bonner, who works for Gonzalez, to hire the plaintiff. Gonzalez offered the plaintiff a weekly salary of $1,590, which works out to $82,680 per year, plus five weeks of paid vacation, seven paid holidays, and health, dental, life, and disability insurance. The offer was in writing, and stated: *4 January 9, 2004 Larry LaCourse Drkaren@wowway.com Mr. LaCourse I would like to provide you with the following offer of employment. Customer: Raytheon Location: Troy Research Park Start Date: January 12, 2004 Salary: $1,590.00 per week Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.104 Page 4 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Anticipated annual salary of $82,680.00 based on 52 weeks Vacation: 5 weeks (built into salary) Holidays: 7 days (built into salary) Effective Dates: Health Insurance: February 1, 2004 Dental Insurance: February 1, 2004 Life Insurance: February 1, 2004 Short Term Disability: February 1, 2004 Gonzalez Rep: David Bonner Should you have any questions or need additional information, please contact me at your convenience. I hope you find my offer acceptable, as I am excited to have you join the Gonzalez team. Sincerely, David L. Bonner Def. Raytheon's Mot. Summ. J. Ex. 4, Offer. The plaintiff expressed concern that his medical benefits would cost him more after the switch to Gonzalez. A second offer was made for $1,616 per week, working out to $84,032 per year. That offer reads: January 26, 2004 Larry LaCourse Drkaren@wowway.com Mr. LaCourse I would like to provide you with the following offer of employment. Customer: Raytheon Location: Troy Research Park Start Date: January 19, 2004 Salary: $1,616.00 per week ($40.40 hour) Anticipated annual salary of $84,032.00 based on 52 weeks Vacation: 5 weeks (built into salary) Holidays: 7 days (built into salary) Effective Dates: Health Insurance: February 1, 2004 Dental Insurance: February 1, 2004 Life Insurance: February 1, 2004 Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.105 Page 5 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Short Term Disability: February 1, 2004 Gonzalez Rep: David Bonner Should you have any questions or need additional information, please contact me at your convenience. I hope you find my offer acceptable, as I am excited to have you join the Gonzalez team. Sincerely, David L. Bonner Def. Raytheon's Mot. Summ. J. Ex. 4, Offer. The plaintiff accepted the job. At his deposition, the following exchange took place: Q. But you got this offer of $1,616 per week, correct? A. 1,616 at 40.40 an hour. Q. Anticipated annual salary of 84,032 dollars? A. Yes. For 52 weeks. Q. And vacation built in, five weeks, seven holidays, correct? A. Seven holidays built in, yes. Q. And then Gonzalez was also offering health insurance, dental insurance, life insurance and short- term disability? A. Actually, long-term disability, too. Q. Did you ultimately get all those benefits from Gonzalez? A. Yes, I did. Q. And you also got that salary from Gonzalez? A. Yes. Q. And was that the salary you received throughout your employment with Gonzalez? *5 A. I believe so. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 185-86. In his affidavit, the plaintiff states, “I accepted Gonzalez/Jackson's offer because the Raytheon people had promised ‘big plans for Larry’ if I went to work for Raytheon/Jackson through Gonzalez. Jackson assigned me to Gonzalez. I did not terminate my employment at Cosworth. They did.” Pl.'s Resp. Ex. 1, LaCourse Aff. at 10. When the plaintiff's employment with Cosworth ended, he claims that he had accrued vacation and comp time that he was owed. He was paid for some unused vacation time; however, Cosworth never paid him for the comp time he had banked, and the plaintiff never attempted to receive this pay from Cosworth. The plaintiff started working for Gonzalez in February 2004. He was assigned to the same General Motors plant at which he previously worked for Cosworth. The plaintiff claims he was an hourly worker, primarily because the second offer-letter recited a labor rate of $40.40 per hour after the stated weekly salary of $1,616. However, David Bonner testified at his deposition that the plaintiff was a salaried employee, even though there may have been weekly time cards. Bonner explained: Q. At the same time you knew that Larry LaCourse was putting in more hours than 40 hours on many occasions or on some occasions; is that fair? A. It was my impression that Larry was putting in more than 40 hours on some weeks. Q. Okay. A. And less than 40 hours on some weeks. Q. But in either situation, he was paid for 40 hours? A. Correct, and possibly 0 hours on some weeks. Q. If there was 0 hours on some weeks, he wouldn't get paid? A. I would have a time card, but he may not have worked that week because built into his salary was five weeks of vacation.... ... Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.106 Page 6 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 Q. So in relationship to the extra hours, how was he going to get paid for those hours? A. He wasn't going to be paid for any extra hours. When I signed him up, he was a salaried employee. ... Q. You didn't tell him he couldn't work more than 40 hours a week, did you? A. Oh, no. He wanted to work 60, 70, he's on salary. Whatever it takes to get the job done.... I was hiring Larry as a salaried employee. Def. Raytheon's Mot. Summ. J. Ex. 3, Bonner Dep. at 16-18, 21-22. The plaintiff claims the comp time arrangement continued after he moved to Gonzalez. He appears to believe that the comp time hours he claims were owed to him by Cosworth also were transferred to Gonzalez. The plaintiff testified as follows at his deposition: Q. Now, during the time that you're accepting employment Gonzalez, did you ever try and work out an arrangement with Mr. Bonner similar to what you apparently had with Cosworth where you could bank time? A. Did I try and work it out? Q. Yes. Did you have any discussions with him about banking comp time? A. Yes. Q. With Mr. Bonner? A. Bank time? *6 Q. Yes. A. Yeah, kind of. ... A. When David Bonner gave me the-I remember everything in detail about it. He gave me these little sheets to fill out, they were handwritten, little triplicates or four pages or something, and I was supposed to keep the pink or the orange copy. You had to fill these out every week, you can put 40 hours per week down here only. I said David, I work sometimes 70, 75 hours a week, he said you can only put down 40 hours per week. I says well, why is that? Sometimes I work 70 to 80 hours. He said whatever arrangements you have had with Graham Jackson in the past, just continue that. So I said okay. Q. Did you have any discussion with the banked time that you had at Cosworth that apparently you hadn't used? A. No. Q. Did you ever try and sit down with anybody at Gonzalez and suggest that they ought to assume whatever liability or responsibility for that banked time that you didn't get paid for when you terminated with Cosworth? A. Well, I kind of figured that heck, they assumed the five weeks vacations, what company would give you five weeks vacation as a new hire, so they absorbed that, so I figured they would absorb whatever- Q. But you never had any discussions about what was going to happen with that prior comp time? A. The reason I didn't is because he said continue with what you're doing with Graham Jackson now, just continue that. ... Q. Now, if you never told Gonzalez that you had all these hours from Cosworth, how was Gonzalez supposed to know that if they employ you, they were going to be responsible for some six or seven hundred or whatever hours you claim that you had banked at Cosworth? A. I would assume my manager, my Raytheon manager, Graham Jackson, who controlled my activities, would convey that to David along with the fact that he was going to give me five weeks vacation, tell him how much he's going to pay me per year or per hour. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 189-91, 214. Mr. Bonner denies telling the plaintiff that any arrangement he previously had with Mr. Jackson would continue. Bonner testified: Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.107 Page 7 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 Q. You had a conversation with Larry LaCourse and he discussed extra hours or extra time or comp time that he had in relationship to more than 40 hours a week and you indicated to him whatever you have going with Graham Jackson in this area, that's my term, you can continue to do that, but we're not going to pay you any more than 40 hours a week; is that a yes or no, if you can answer that? A. I don't' believe we had a conversation that was stated in that manner. Q. Did you have a conversation similar to that and if so, what was it? A. I believe we had a conversation that things will stay the same, that you're going to be doing the same job. I am going to be paying you a salary. I understand that you won't be working 40 hours every week and I understand that you might be working more than 40 hours. *7 Def. Raytheon's Mot. Summ. J. Ex. 3, Bonner Dep. at 20. Defendant Jackson had a different understanding of the comp time arrangement. According to Jackson, he would agree to let the plaintiff take a day off here and there if the plaintiff had worked especially long hours the previous few weeks, but the policy was informal and random. Jackson explained: Q. Did Larry LaCourse have comp time when he was doing this type of work? A. Yes. Q. Okay. Can you tell me what that comp time consisted of, from the years 19-I think you said that you were familiar with him from 1997 to 2004, what did that comp time consist of? A. From 1997 to 2000 I had no dealings with it and couldn't tell you anything about how any of that was administered or taken care of. Q. Okay. A. On Larry's individual case. I wouldn't know. From 2000 to 2004, if Larry was required to travel exorbitantly by the plant's needs, we would afford Larry, we would afford Larry time off during the week to make up for that extra effort that he put out. Q.... so the comp time is only in relationship to extra time that was travel and then you can take it off at some other time for personal time, is that what you're saying? A. That's correct. Q. So I can do a mathematical one in my head, if you get five hours of comp time, you can use five hours of personal time at some other time; is that correct? A. No, there's no specifics on that. It's very ambiguous. It's based on my individual conversation with that person. There's no specific guidelines. I have no specific number. If that person comes to me and says General Motors requires me to be at the plant the last five Sundays in a row, do you think I could take-not come in the office, for example, this Friday because I've really been stretched these last four Sundays I had to travel? And I would say yes in most cases. Q. So you were the arbiter of what someone could do with their comp time; is that correct? A. Again, I would afford them time away from the office of time off, but based on what they had done above and beyond, but nothing-there's no direct link to the number of hours or anything because again, I don't track their- again, we talked about it. I don't track them. Q. Let me see if I can get it clear. You're telling me you don't track their hours when they're working, is that what you're saying? A. Yes. Q. Okay. So since you don't track their hours, you still make the determination on what comp time they can use, is that what you're saying? ... A. Where I'm going with this is that General Motors is looking for a certain service. If they don't see Larry, for example, on hand providing that service they're going to come back to me and say why aren't we getting this service today? And so from that point of view, I had to, I have to communicate with Larry to say Larry-Larry would tell me I have traveled for the last six Sundays in a row, for example. I would like to not be present this Friday. Is that okay with you? And if it met the mark and I believed what he had told me, that he had Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.108 Page 8 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 worked the lasted [sic] six Sundays in a row, then in most cases, yes. I would say that's fine. I'll answer to General Motors if they are looking for you. *8 Q. But you're real clear that it's not if you worked five extra hours, you get five hours off; right? A. Absolutely. There's no correlation, none whatsoever. ... Q. Is this comp time scenario, for lack of a better term, written down anyplace? A. No. Q. It's not written down, but the people that I mentioned, including Larry LaCourse, all know about it; am I right? A. They're aware of the policy. Q. Okay, and I don't want to miss-I don't want to mess up exactly what it is. So can you tell me to the best of your knowledge exactly what the policy is? A. It's nothing formal. It's strictly verbal and it's that if you can communicate your situation for the amount of work or exorbitant travel that you've had to do on behalf of General Motors, that we will consider that or that I would consider that and there's a possibility that you may not have to show up another time. Q. Could people use this for sick time? A. No. Def. Raytheon's Mot. Summ. J. Ex. 2, Jackson Dep. at 41-44, 46. Mr. Bonner testified that there was no comp time arrangement at all as far as he was concerned. He said that he “understood that there may be times Monday through Friday that [the plaintiff] may not be working. I wouldn't agree to the word comp time.” Def. Raytheon's Mot. Summ. J. Ex. 3, Bonner Dep. at 21. His description of the arrangement was roughly similar to Jackson's understanding of the arrangement. Bonner said: My expectations, if that's how he would be working is based on I had other people there. I knew how many hours approximately they would work. I knew there were plenty of times that hey, you know, I got slammed at the plant and I'm taking Monday off and I did not find that unusual. If I had to go back to my office tonight and do a quote and work on it until 2:30 in the morning, if I don't have anything going on tomorrow, I might not be at the office, but I may have to be at the office if there is something going on and I would expect Larry to do that and expect that that's what he was doing in the past. Id. at 21-22. The plaintiff testified that he had to complete time cards in order to get paid while at Gonzalez. He said that he prepared the time sheets in advance-sometimes months in advance of the pay periods-and recorded forty hours per week regardless of the time he actually worked. The plaintiff testified that David Bonner instructed him to do this. When the plaintiff protested that he sometimes worked more than forty hours, he said Bonner responded by telling him “whatever arrangement I had for overtime or comp hours with Graham Jackson, just to continue that. And I go okay. And Graham knew of it, Danielle knew of it, my administrative assistant, everyone there works more than 40 hours a week and everyone does the same thing.” Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 242. Mr. Bonner acknowledged that time cards were used to verify that the plaintiff was working as required by General Motors and to show to the bank auditor who approves loans. Bonner testified that the amount of the plaintiff's weekly pay did not vary. He admitted that sometimes the plaintiff worked more than forty hours and sometimes he worked less; but either way, Bonner testified, the plaintiff was paid the same amount. Bonner said he directed the plaintiff to put 40 hours on the time cards regardless of how many hours he worked, since the time cards were not used to determine the plaintiff's pay. *9 As a plant training consultant, the plaintiff researched, developed, and presented course material to the auto assembly plant repair technicians. When the plaintiff transferred to the General Motors site, he found a document titled, “STG Plant Training Consultant Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.109 Page 9 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 Overview” in the desk he was assigned. He agreed that the document accurately portrayed his job duties. The document read: 1. Work with each assigned plant contact person to develop their short and long term training needs. 2. Work with the Employee Development representative to develop employee training tracking system. 3. Research and modify existing training materials to meet individual plant needs. 4. Identity future product training needs and develop new training material in coordination with product and powertrain engineers. 5. Use word processor software and other on-site resources to develop and produce training materials. 6. Spend approximately one half of total work time at assigned plant locations facilitating training by one or more of the following methods: a) Directly train the trainer or individuals as required. b) Assist the plant in securing outside contract instructors if required. c) Assist plant in scheduling technicians into local training centers or affiliated colleges if required. 7. Assist plant repair area with difficult-to-diagnose problems when possible. 8. Provide management with contact reports for each plant contact and progress reports as required. Def. Raytheon's Mot. Summ. J. Ex. 5, STG Overview. He acknowledged that he created training materials. He testified that he “would exercise [his] discretion to research and otherwise modify as necessary whatever training materials existed in order to respond to individual plant needs.” Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 139. Those tasks comprised about twenty-five percent of the plaintiff's job. He spent about thirty to forty percent of his time at the plant. Some of the work required physical exertion. But defendant Jackson explained that the plaintiff was not permitted to use tools to repair cars; he was only permitted to use tools to show the General Motors union workers how to repair cars. Graham Jackson was the plant training supervisor for Raytheon. The plaintiff testified that his training plans had to be approved by Jackson, and Jackson acknowledged that he designated the plaintiff's plant assignments. However, the plaintiff signed an acknowledgment that he was not an employee of Raytheon. The acknowledgment reads: I, Lawrence K. LaCourse acknowledge that I am a Gonzalez Contract Services employee. I realize that although I may be assigned to provide services at a customer facility, total responsibility for my benefits, pay, insurance, and all other aspects of the employee/ employer relationship is maintained with Gonzalez Contract Services. I further acknowledge that the customer (Raytheon) utilizing my services as a Gonzalez Contract Services employee, is not my employer and that my services may be terminated at any time. *10 Def. Gonzalez's Mot. Summ. J. Ex. 4, Employee Acknowledgment. The employment application, which the plaintiff signed, further states, I agree that any action or suit against the employer arising out of my employment or termination of employment including, but not limited to, claims arising under State or Federal Civil Rights Statutes, must be brought within 180 days of the event giving rise to the claims or be forever barred. I waive any limitations period to the contrary. Ibid. The plaintiff worked for Gonzalez for about three months. In late April, Raytheon contacted Mr. Bonner and told him that the plaintiff's services were no longer needed. Mr. Bonner tried to find another plant for the plaintiff but was unable to do so, and the plaintiff was laid off. Mr. Bonner asked the plaintiff what happened to cause Raytheon to request his removal. Mr. Bonner testified that the plaintiff admitted he sent inappropriate emails. Regarding his termination, the plaintiff's affidavit states as follows: Gonzalez did not fire me, Raytheon did. The official stated reason for me Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.110 Page 10 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 leaving my employment was laid off, lack of work. Raytheon told me to leave. Raytheon had work for me. The lack of work excuse given to me was untrue. Raytheon advertised for my position immediately after I left. Pl.'s Resp. Ex. 1, LaCourse Aff. at 13. The plaintiff filed the present lawsuit on August 26, 2005. His complaint pleads five counts. Count one is labeled “Federal Fair Labor Standards Claim” and alleges that the defendants wilfully violated sections six and seven of the FLSA, 29 U.S.C. §§ 206, 207. Count two is labeled “Violations of the Fair Labor Standards Act Incorporated in the Policies and Procedures of Defendants.” It alleges that the defendants incorporated the provisions of the FLSA into their policies and procedures and thus violated those policies by failing to comply with the Act, entitling the plaintiff to compensation under the Act. This count also alleges that the defendants acted wilfully. Count three alleges a violation of the First Amendment. Count four, labeled “Fraud/Duress,” alleges that defendants Gonzalez and Raytheon had policies prohibiting falsification of records, yet the plaintiff was required to falsify his time records. The plaintiff claims he “had the understanding” that he would be disciplined if he refused, and he therefore complied under duress. This count states that “Defendants Gonzalez and Raytheon hence fraudulently represented to the Plaintiff their policies, to which Plaintiff suffered damages of lost compensation.” Compl. ¶ 52. Count five is labeled “Breach of Contract-Gonzalez and Raytheon,” and it alleges that Gonzalez's and Raytheon's employee handbooks created “an implied contract of compensation” and that the plaintiff had a “legitimate expectation” that he would be paid overtime at a rate of timeand-a-half. The plaintiff contends that the failure of Gonzalez and Raytheon to compensate the plaintiff in accordance with these procedures violated the contract and the legitimate expectations. *11 The defendants move for summary judgment as to all these counts. II. A motion for summary judgment under Federal Rule of Civil Procedure 56 presumes the absence of a genuine issue of material fact for trial. The Court must view the evidence and draw all reasonable inferences in favor of the non-moving party, and determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotes omitted). A fact is “material” if its resolution affects the outcome of the lawsuit. Lenning v. Commercial Union Ins. Co., 260 F.3d 574, 581 (6th Cir.2001). “Materiality” is determined by the substantive law claim. Boyd v. Baeppler, 215 F.3d 594, 599 (6th Cir.2000). An issue is “genuine” if a “reasonable jury could return a verdict for the nonmoving party.” Henson v. Nat'l Aeronautics & Space Admin., 14 F.3d 1143, 1148 (6th Cir.1994) (quoting Anderson, 477 U.S. at 248). Irrelevant or unnecessary factual disputes do not create genuine issues of material fact. St. Francis Health Care Ctr. v. Shalala, 205 F.3d 937, 943 (6th Cir.2000). When the “record taken as a whole could not lead a rational trier of fact to find for the nonmoving party,” there is no genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Thus a factual dispute that “is merely colorable or is not significantly probative” will not defeat a motion for summary judgment that is properly supported. Kraft v. United States, 991 F.2d 292, 296 (6th Cir.1993); see also Int'l Union, United Auto., Aerospace and Agric. Implement Workers of Am. v. BVR Liquidating, Inc., 190 F.3d 768, 772 (6th Cir.1999). The party bringing the summary judgment motion has the initial burden of informing the district court of the basis for its motion and identifying portions of the record that demonstrate the absence of a genuine dispute over material facts. Mt. Lebanon Pers. Care Home, Inc. v. Hoover Universal, Inc., 276 F.3d 845, 848 (6th Cir.2002). The party opposing the motion then may not “rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact” but must make an affirmative showing with proper evidence in order to Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.111 Page 11 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 defeat the motion. Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir.1989). A party opposing a motion for summary judgment must designate specific facts in affidavits, depositions, or other factual material showing “evidence on which the jury could reasonably find for the plaintiff .” Anderson, 477 U.S. at 252. If the non-moving party, after sufficient opportunity for discovery, is unable to meet his or her burden of proof, summary judgment is clearly proper. Celotex Corp., 477 U.S. at 322-23. *12 Although “[i]n evaluating the evidence, [the district court] ‘draw[s] all reasonable inferences therefrom in a light most favorable to the non-moving party,’ “ Rodgers v. Banks, 344 F.3d 587, 595 (6th Cir.2003), the party who bears the burden of proof must present a jury question as to each element of the claim. Davis v. McCourt, 226 F.3d 506, 511 (6th Cir.2000). Failure to prove an essential element of a claim renders all other facts immaterial for summary judgment purposes. Elvis Presley Enters., Inc. v. Elvisly Yours, Inc., 936 F.2d 889, 895 (6th Cir.1991). A. Section 207 of the Fair Labor Standards Act requires that employers pay their covered employees one and one-half times their “regular rate” of pay for all hours worked in excess of forty hours in a workweek: Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. 29 U.S.C. § 207(a)(1). This requirement was designed to encourage employers to hire additional employees, reducing unemployment. Brooks v. Vill. of Ridgefield Park, 185 F.3d 130, 133 (3d Cir.1999) (“Congress believed that requiring employers to pay an overtime premium whenever an employee worked over forty hours in a work week would encourage employers to hire additional workers rather than pay the overtime penalty.”). Defendants Raytheon and Jackson contend that the plaintiff is not protected by section 207 because (1) they are not “employers” within the meaning of the Act, and (2) LaCourse is not a covered employee because he is exempt from the Act under section 213(a)(1), 29 U.S.C. § 213(a) (1), and the regulations that interpret that section. 1. The FLSA applies only to those engaged in an employment relationship. The Act helpfully defines an employee as “any individual employed by an employer.” 29 U.S.C. § 203(e). To “employ” means “to suffer or permit to work.” 29 U.S.C. § 203(g). The Act defines “employer” as those “acting directly or indirectly in the interest of an employer in relation to an employee .” 29 U.S.C. § 203(d). In Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961), the Supreme Court explained that it is the “economic reality” of the relationship that determines whether a worker is an employee of another person or entity within the meaning of the FLSA. The Sixth Circuit has explained that this inquiry is fact- specific: [E]conomic dependence may be the ultimate controlling factor in a given situation for finding an employment relationship. Another panel of this court has emphasized that in examining a particular factual setting the total relationship must be examined, rather than isolated factors. Dunlop v. Dr. Pepper-Pepsi Bottling Co., 529 F.2d 298 (6th Cir.1976). The issue of the employment relationship does not lend itself to a precise test, but is to be determined on a case-by-case basis upon the circumstances of the whole business activity. *13 Donovan v. Brandel, 736 F.2d 1114, 1116 (6th Cir.1984). In Brandel, the Sixth Circuit looked Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.112 Page 12 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 at six factors to determine whether an employer- employee relationship existed: (1) the permanency of the relationship between the parties; (2) the degree of skill required for the rendering of the services; (3) the worker's investment in equipment or materials for the task; (4) the worker's opportunity for profit or loss, depending upon his skill; (5) the degree of the alleged employer's right to control the manner in which the work is performed; and (6) whether the service rendered is an integral part of the alleged employer's business. Brandel, 736 F.2d at 1117. Under Department of Labor regulations, more than one entity or individual may be an employer of a person within the meaning of the FLSA. (b) Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as: (1) Where there is an arrangement between the employers to share the employee's services, as, for example, to interchange employees; or (2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or (3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. 29 C.F.R. § 791.2(b) (2004). Individuals can also be considered employers under the Act. In United States Department of Labor v. Cole Enterprises, Inc., 62 F.3d 775, 778 (6th Cir.1995), the defendants were a company that owned a restaurant and the company's president, who owned fifty percent of the company's stock. The Sixth Circuit held that the president was a co-employer for purposes of the FMLA where the individual “was engaged in running the business, ... he was authorized to issue checks on the corporate accounts, ... he and his wife had custody and control of the employment records, and were responsible for maintaining those records[,] ... [and he and] his wife determined the employment practices for the Echo Restaurant, including hiring, firing, rates of pay and hours of work .” Id. at 778 (internal citations omitted). The Sixth Circuit has recognized that “ ‘[u]nless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract.’ “ Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 315 (6th Cir.1998) (quoting Restatement (Second) of Agency § 320), as cited in Riddle v. Lacey & Jones, 135 Mich.App. 241, 351 N.W.2d 916, 919 (1984); see also Soberay Mach. & Equip. Co. v. MRF Ltd., Inc., 181 F.3d 759, 767-68 (6th Cir.1999) (applying Ohio law and holding “that ‘[a]n agent who acts for a disclosed principal and who acts within the scope of his authority and in the name of the principal is ordinarily not liable on the contracts he makes' because the third party intended to deal with the principal, not the agent”); Summit Petroleum Corp. of Indiana v. Ingersoll-Rand Fin. Corp., 909 F.2d 862, 868 (6th Cir.1990) (same, applying Kentucky law). Likewise, under Title VII of the Civil Rights Act of 1964, “an individual employee/supervisor, who does not otherwise qualify as an ‘employer,’ may not be held personally liable under Title VII.” Wathen v. Gen. Elec. Co., 115 F.3d 400, 405 (6th Cir.1997); see also Burlington Indus. v. Ellerth, 524 U.S. 742, 754, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998) (observing that “Congress has directed federal courts to interpret Title VII based on agency principles”). *14 However, Section 203(d) of the Fair Labor Standards Act as codified in Title 29 broadly defines “employer” to mean “any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Supreme Court has held that the term is to be construed expansively to fulfill the remedial goals of the Act, and therefore the FLSA contemplates that more than one employer may be responsible for violations under the Act. See Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 38 L.Ed.2d 406 (1973). Likewise, the Sixth Circuit has held that “[t]he remedial purposes of the FLSA require courts to define ‘employer’ more broadly than the term would be interpreted in traditional common law applications.” Dole v. Elliott Travel & Tours, 942 F.2d 962, 965 (6th Cir.1991) (internal quotes and citations omitted). In Dole, the court set forth an “economic realities” test to determine whether a supervisor may be considered an Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.113 Page 13 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 13 “employer” under the FLSA. Id. at 965 (holding that “in deciding whether a party is an employer, economic reality controls rather than common law concepts of agency”). The main focus of the inquiry is whether the supervisor exercises “substantial control of the terms and conditions of the work of [the] employee.” Falk, 414 U.S. at 195. The Court finds that there are facts in dispute that prevent a determination as a matter of law the Raytheon was not LaCourse's employer. As noted above, the factors to consider are economic dependence, permanency of the relationship, the degree of skill used by the employee, the worker's investment in material, the worker's opportunity for profit or loss, the degree of control exerted by alleged employer, and whether service provided is integral to employer's business. Donovan, 736 F.2d at 1116-17. Although four of these factors tend to show that there is no employment relationship between Raytheon and the plaintiff, the other three tend to show there is. The plaintiff was not economically dependent on Raytheon. He received his paycheck from Gonzalez, and apparently at some point General Motors had contracted directly with Gonzalez rather than going through Raytheon. The plaintiff appears to utilize a good degree of skill in his job. Further, the plaintiff's position as a trainer is not integral to Raytheon's business. However, the plaintiff did not invest in equipment or have opportunity for profit or loss, and he has alleged that Raytheon had a great deal of control over how he did his job. These factors are in favor of finding an employment relationship. However, the undisputed facts favor summary judgment for defendant Jackson. Although individuals can be employers under the Act, this only happens where such an individual “has operational control and qualifies as an ‘employer’ for the purposes of FLSA.” Cole, 62 F.3d at 778. The plaintiff has presented no evidence that Mr. Jackson qualifies as such a person. The plaintiff claims in his deposition that Mr. Jackson approved his training plans in advance and directed his daily activities, but he did not testify that Mr. Jackson has any ownership or operational control over Raytheon, Gonzalez, or the General Motors facility where the plaintiff worked. The plaintiff did testify that Jackson helped him get the job with Gonzalez, encouraged him to take it, and helped negotiate his salary from Gonzalez. However, the plaintiff testified that he received his salary from Gonzalez. In Finke v. Kirtland Community College, this Court found a college administrator to be an employer under the Act. However, in that case, the administrator was alleged to be the “de facto president of the college, [who] hired Finke, supervised his work, set his wages, prescribed the conditions of his employment, authorized him to work on special projects off site, and approved his time sheets.” Finke v. Kirtland Cmty Coll. Bd. of Tr., 359 F.Supp.2d 593, 599 (E.D.Mich.2005). The plaintiff in Finke made allegations that allowed a determination that the individual defendant controlled the operation of the college. The plaintiff in this case has failed to come forward with any such proof as to Graham Jackson. He has made allegations only that Mr. Jackson has control over his work individually. He has failed to make any allegations that Mr. Jackson had operational control over Gonzalez, Raytheon, or General Motors. Mr. Jackson is not an employer and will be dismissed from the case. *15 There is no question that Gonzalez was the plaintiff's employer from February 2004 through late April or early May of that year. Gonzalez does not argue otherwise. 2. All defendants contend that the plaintiff was an exempt employee, however. In refuting that argument, the plaintiff relies in his brief upon Department of Labor regulations that went into effect in August 2004, well after his employment with Gonzalez ended. Under those “new” rules, an employee must make at least $455 per week ($23,660 per year) to be considered exempt. Employees who make more than $23,660 per year but less than $100,000 are subject to the “standard duties” test. Employees who make over $100,000 per year are subject to the “highly-compensated” duties test. The long and short tests applicable under the pre-August 23, 2004 regulations are no longer applied. The new regulations “do not apply to manual laborers or other ‘blue collar’ workers who perform work involving repetitive operations with their hands, physical skill and energy.” 29 C.F.R. § 541.3(a). The defendants insist that these new regulations are not applicable to the present dispute, and at oral argument on the motions the plaintiff acknowledged that the case must be decided under the regulations in effect during his employment. The Court believes that cases decided after the amendment date must apply the prior regulations if the claim arose before the new regulations took effect. See, e.g. Gruener v. Ohio Cas. Co., 416 F.Supp.2d 592, Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.114 Page 14 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 14 604-05 (S.D.Ohio 2005) (applying pre-August 23, 2004 regulations). The governing statute exempts from the FLSA's premium wage requirement certain “white collar” workers: executive, administrative, and professional employees. At the time of the plaintiff's employment, the exemption provision read as follows: (a) Minimum wage and maximum hour requirements. The provisions of section 206 (except subsection (d) in the case of paragraph (1) of this subsection) and section 207 of this title shall not apply with respect to- (1) any employee employed in a bona fide executive, administrative, or professional capacity (including any employee employed in the capacity of academic administrative personnel or teacher in elementary or secondary schools), or in the capacity of outside salesman. 29 U.S.C. § 213(a)(1). The regulations implementing this section further provided: The term employee employed in a bona fide * * * administrative * * * capacity in section 13(a)(1) of the Act shall mean any employee: (a) Whose primary duty consists of ... [t]he performance of office or non-manual work directly related to management policies or general business operations of his employer or his employer's customer ... and (b) Who customarily and regularly exercises discretion and independent judgment; and (c) (1) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (as such terms are defined in the regulations of this subpart), or *16 (2) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or (3) Who executes under only general supervision special assignments and tasks; and (d) Who does not devote more than 20 percent ... of his hours worked in the workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (a) through (c) of this section; and (e) (1) Who is compensated for his services on a salary or fee basis at a rate of not less than $155 per week ... exclusive of board, lodging, or other facilities ... Provided, That an employee who is compensated on a salary or fee basis at a rate of not less than $250 per week ... exclusive of board, lodging, or other facilities, and whose primary duty consists of the performance of work described in paragraph (a) of this section, which includes work requiring the exercise of discretion and independent judgment, shall be deemed to meet all the requirements of this section. 29 C.F.R. § 541.2 (2004). Section 541.214, a “special proviso for high salaried administrative employees,” provides further information about employees who are paid over $250 per week: (a) Except as otherwise noted in paragraph (b) of this section, § 541.2 contains a special proviso including within the definition of “administrative” an employee who is compensated on a salary or fee basis at a rate of not less than $250 per week exclusive of board, lodging, or other facilities, and whose primary duty consists of either the performance of office or nonmanual work directly related to management policies or general business operations of the employer or the employer's customers ... where the performance of such primary duty includes work requiring the exercise of discretion and independent judgment. Such a highly paid employee having such work as his or her primary duty is deemed to meet all the requirements in § 541.2(a) through (e). If an employee qualifies for exemption under this proviso, it is not necessary to test the employee's qualifications in detail under § 541.2(a) through (e). 29 C.F.R. § 541.214. These regulations create a “long test,” applying to employees making between $155 and $249 Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.115 Page 15 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 15 per week, and a “short test,” applying to employees who make at least $250 per week. See Ale v. Tennessee Valley Auth., 269 F.3d 680, 683 (6th Cir.2001). The employer bears the burden of proving that the exemption applies. Renfro v. Indiana Michigan Power Co., 370 F.3d 512, 515 (6th Cir.2004). An employee can use “discretion and independent judgment” even if his decisions are reviewed by a supervisor or manager. 29 C.F.R. § 541.207(e)(1) (2004) (stating that an employee may exercise discretion despite the absence of “finality that goes with unlimited authority and a complete absence of review,” and even when “the decisions are revised or reversed after review”). *17 As noted above, an employee's work must be “directly related to management policies or general business operations of the employer or the employer's customers” before he can be considered administrative. The regulations specifically recognize that sometimes a company contracts its employees out to work at another company's facility. Such employees may qualify as exempt administrative employees by doing work related to the general business operations of the company at which they are assigned. 29 C .F.R. § 541.205(d) (2004) (noting that “many bona fide administrative employees perform important functions as advisers and consultants but are employed by a concern engaged in furnishing such services for a fee.... Such employees, if they meet the other requirements of § 541.2, qualify for exemption regardless of whether the management policies or general business operations to which their work is directly related are those of their employer's clients or customers or those of their employer”). The defendants contend that the plaintiff fits within the description of an administrative worker under the “short test” set out in the regulations. They say that the plaintiff earned a salary that was well above the $250-per-week minimum, his work in devising repair and production systems was primarily non-manual, and the manner in which he devised the training protocols required the exercise of discretion and independent judgment. The plaintiff disputes each of these elements. He argues that he was paid by the hour rather than a salary, he worked primarily on the plant floor performing manual tasks, and his work was closely supervised rather than independent. Both parties cite the case of Renfro v. Indiana Michigan Power Co., which, the Court believes, provides the controlling authority for adjudicating the present motions. In that case, the plaintiffs sued a power company (AEP) for overtime wages and the defendant contended that the employees were exempt. The employees worked as “planners,” whose jobs entailed the identification of maintenance or new construction tasks and preparing work packages for execution in the field. The job required some field work in order to analyze the job needs, determine the procedures that should be used, and obtain the necessary permits. The plaintiffs were required to account for their time during the day and make up missed days, but their pay was never reduced for missing work. The court of appeals held that the employees were exempt under the “short test,” which the court summarized as follows: AEP must demonstrate (1) that it pays the planners at least $250 per week on a salary or fee basis; (2) that the planners' primary duty consists of office or nonmanual work directly related to AEP's management policies or general business operations; and (3) that the planners' primary duty requires them to exercise discretion and independent judgment. Renfro, 370 F.3d at 516. The court first concluded that the plaintiffs were salaried workers even though they were required to account for their time and make up partial day absences, because their pay was never reduced for missing work. The court then rejected the employees' argument that performance of manual work in the field precluded the finding that they were white collar workers. “Performing some manual work does not automatically remove an employee from exempt status so long as the manual work is ‘directly and closely related to the work requiring the exercise of discretion and independent judgment’... [T]he field walk- downs-performed as part of the planners' preparation of work repair packages-are ‘directly and closely related to the [planners'] work requiring the exercise of discretion and independent judgment,’ supporting exemption from the FLSA.” Id. at 517 (citing 29 C.F.R. § 541.203(b)). The court next determined that the plaintiffs serviced the business by doing work that was directly related to Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.116 Page 16 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 16 the employer's general business operations. The court reasoned: *18 Under the administrative/production dichotomy analysis, the job of “production” employees “is to generate (i.e.‘produce’) the very product or service that the employer's business offers to the public.” Reich v. John Alden Life Ins. Co., 126 F.3d 1, 9 (1st Cir.1997). When employees engage in work that is “ancillary to an employer's principal production activity,” those employees are administrative. Martin v. Cooper Elec. Supp. Co., 940 F.2d 896, 904 (3d Cir.1991). This analysis, however, “is only useful to the extent that it is a helpful analogy in the case at hand.” Schaefer, 358 F.3d at 402-03. AEP's principal production activity is generating electricity, and the product it offers the public is electricity; the planners' primary duty-creating plans for maintaining equipment and systems in the nuclear plant-is ancillary to AEP's principal production activity of generating electricity. While not precisely “administrative,” the planners' duties form the type of “servicing” (“advising the management, planning,” etc.) that the FLSA deems administrative work directly related to AEP's general business operations. Id. at 517-18. The court further concluded that the plaintiffs' work was of substantial importance to the employer, finding that “[t]heir work-interpreting and carrying out plant policies, creating plans that permit the continued operation of the equipment and systems that generate AEP's main product-affects AEP's general business operations to a substantial degree.” Id. at 518. Finally, the court found that the job required the plaintiffs to exercise discretion and independent judgment. The court viewed the plaintiffs' primary duty as solving problems. The court explained: The process of generating repair work packages is neither wholly mechanical nor restricted to “merely appl[ying] knowledge in following prescribed procedures.” 29 C.F.R. § 541.207(c)(1). When there is no procedure that can be applied to a particular task, the planners independently determine the nature of the repair task and prepare a repair plan. In those situations, planners use their own skill, experience, judgment, and discretion in formulating a repair solution. Additionally, the planners exercise independent decisionmaking when choosing among various options to remedy a problem-for example, determining whether to replace or repair equipment. The deposition evidence demonstrates that the planners make such independent decisions and exercise judgment on a daily basis. Id. at 519. In this case, the Court finds that there are no material fact disputes as to the plaintiff's job duties and the manner of his payment. Rather, the legal consequences that flow from those facts form the main contest in this case. Because the plaintiff earned more than $250 per week, the short test applies. The first element of that test requires that the plaintiff's wage be paid on a salary or fee basis. For defendants Jackson and Raytheon, the Court finds that the first element of the test is satisfied. For reasons explained below, Gonzalez has not met its burden on that element. *19 The plaintiff testified that he was offered the position with Gonzalez at $1616 per week, plus five weeks of vacation and medical benefits, which he accepted. The plaintiff admitted this is what he was paid in fact. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 185-86 (“Q. Did you ultimately get all those benefits from Gonzalez? A. Yes, I did. Q. And you also got that salary from Gonzalez? A. Yes. Q. And was that the salary you received throughout your employment with Gonzalez? A. I believe so.”). An employee is salaried if he “regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” 29 C.F.R. § 541.118(a). The plaintiff has presented no evidence that his weekly salary of $1616 was ever reduced based on the quality or quantity of his work and in fact admitted that he did receive that salary through his employment. “It is only when an employer actually deducts from an employee's paycheck that the employee is ineligible for the exemption.” Renfro, 370 F.3d at 516. The plaintiff, therefore, was paid on a salary basis. The second element of the short test has been satisfied as well. The plaintiff acknowledged that his job was mostly office or non-manual work directly related to the general business operations of General Motors. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 34 (“[M]y main function was to train people in the final repair areas at automotive assembly plants, ... to give them technical training and assist them in their jobs.”). Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.117 Page 17 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 17 The plaintiff insists that he spent a good part of his time on the plant floor trying to devise repair solutions. However, he agreed that the description of his position in the STG Plant Training Consultant Overview accurately set forth his work duties, and that document put him in the plaint training others “approximately one half of total work time.” Def. Raytheon's Mot. Summ. J. Ex. 5, STG Overview. Working as a hands-on expert to figure out how to do certain repairs does not make the plaintiff a manual worker. “Performing some manual work does not automatically remove an employee from exempt status so long as the manual work is ‘directly and closely related to the work requiring the exercise of discretion and independent judgment.’ “ Renfro, 370 F.3d at 516 (quoting 29 C .F.R. § 541.203(b)). Moreover, the plaintiff's work was directly related to the management policies or general business operations of General Motors, just as the planners' work in Renfro with respect to AEP. The plaintiff was not engaged in producing motor vehicles; rather, he taught the production employees how to conduct certain repairs so the assembly line could proceed. The plaintiff was a consultant, not a production worker. “When employees engage in work that is ‘ancillary to an employer's principal production activity,’ those employees are administrative.” Renfro, 370 F.3d at 517 (quoting Martin v. Cooper Elec. Supp. Co., 940 F.2d 896, 904 (3d Cir.1991). *20 Finally, when the plaintiff did use a hands-on approach to figure out how to repair something, he was exercising discretion and independent judgment. The plaintiff's affidavit states, “I and the others would use the tools and take the part apart ... so that we would know how to take those apart and teach other people how to take these apart and put them back together, and how to make certain repairs on them.” Pl.'s Resp. Ex. 1, LaCourse Aff. at 2-3. The plaintiff admitted he exercised his discretionary judgment, and General Motors relied on his expertise. He was asked at his deposition, “So you would exercise your discretion to research and otherwise modify as necessary whatever training materials existed in order to respond to individual plant needs?” He replied, “Correct .” Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 139. Further, he was asked, Q. I guess what I'm trying to understand is, however the plant contact people were at these various General Motors plants, I assume they relied upon your expertise in order to address their short and long-term training? A. Right, it was mutual. ... Q. I understand. But you were the expert making the recommendations and you would present those recommendations to the General Motors person to either accept or not; is that fair? A. Sure. I would put together the package and he could say let's change this or let's add this. But all of our contacts which we had to provide Graham Jackson a contact list and keep it maintained, that was the person that we dealt with, to make those decisions. Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 119-20. The plaintiff used his “own skill, experience, judgment, and discretion in formulating a repair solution.” Renfro, 370 F.3d at 519. The fact that Mr. Jackson provided some supervision of his work does not mean that the plaintiff did not use discretion. The regulations do not require “that the decisions made by the employee must have a finality that goes with unlimited authority and a complete absence of review.” 29 C.F.R. § 541.207(e)(1) (2004). As to defendants Raytheon and Jackson, the Court finds that the plaintiff was an exempt administrative employee under the FLSA and the regulations that were in effect at the time of his employment. Therefore, counts one and two of the complaint will be dismissed as to them. The result is different as to defendant Gonzalez, however, because Gonzalez admitted in its answer to the plaintiff's complaint “that Plaintiff is paid on an hourly basis.” Gonzalez's Answer at ¶ 22. “Statements in pleadings that acknowledge the truth of some matter alleged by an opposing party are judicial admissions binding on the party making them.” Ahghazali v. Sec'y of Health & Human Serv., 867 F.2d 921, 927 (6th Cir.1989). Gonzalez's statement is “deliberate, clear and unambiguous,” and constitutes a judicial admission. See Greenwell v. Boatwright, 184 F.3d 492, 498 (6th Cir.1999). Gonzalez is thus precluded from arguing that the defendant is a salaried employee for the purpose of the FLSA. Ferguson v. Neighborhood Hous. Serv. of Cleveland, Inc., 780 F.2d 549, 550-51 (6th Cir.1986) (applying rule of judicial admission made in pleadings in FLSA case). Gonzalez filed a motion to amend its answer after oral argument of these motions. Unless that motion is adjudicated it its favor, the admission is binding Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.118 Page 18 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 18 and precludes summary judgment for defendant Gonzalez because hourly workers cannot be found exempt under 29 U.S.C. § 213(a). B. *21 The plaintiff also brought claims against the defendants for violating his rights under the First Amendment based on allegations that he was forced to falsify his time records. This claim lacks merit because the plaintiff has not alleged, and there is no evidence even remotely suggesting, that the defendants are government actors. The First Amendment is only a restriction on government action. For the plaintiffs' claim to succeed, the defendant must qualify as a state actor. “To constitute state action, ‘the deprivation must be caused by the exercise of some right or privilege created by the State ... or by a person for whom the State is responsible,’ and ‘the party charged with the deprivation must be a person who may fairly be said to be a state actor.’ “ West v. Atkins, 487 U.S. 42, 49, 108 S.Ct. 2250, 101 L.Ed.2d 40 (1988). The plaintiff all but conceded this point at oral argument, and the Court finds that count three of the complaint must be dismissed. C. In count four of the complaint, the plaintiff reiterates his allegations that he was forced by Raytheon and Gonzalez to falsify his time records, and he alleges that these facts support a claim for fraud and duress. At oral argument, the Court stated its intention to dismiss this claim against Gonzalez because the plaintiff signed a contract that contained an abbreviated statute of limitations. In Wineman v. Durkee Lakes Hunting & Fishing Club, Inc., 352 F.Supp.2d 815 (E.D.Mich.2005), this Court held that public policy does not forbid parties from contractually shortening the statute of limitations for claims other than FLSA claims. Id. at 820 (observing that other “courts have pointed to statutory provisions that limit the time for bringing certain labor-related claims within six months as evidence that such a period is not inherently unreasonable”). The plaintiff has not shown that the six-month contractual statute of limitations is unreasonable in this case. Because his claims accrued at the latest in April 2004 when he was fired, and he did not file his complaint until August 26, 2005, the claims against defendant Gonzalez (other than the FLSA claim) are barred and shall be dismissed. Raytheon contends that the fraud claim must be dismissed against it because the plaintiff failed to plead the required elements with particularity as required by Rule 9(b), and the plaintiff has not established all the elements of a fraud claim under Michigan law. In order to establish a claim for intentional fraud, Michigan law requires plaintiffs to plead and prove the following elements: (1) That defendant made a material representation; (2) that it was false; (3) that when he made it he knew that it was false, or made it recklessly, without any knowledge of its truth, and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury. Each of these facts must be proved with a reasonable degree of certainty, and all of them must be found to exist; the absence of any one of them is fatal to a recovery. *22 Hi-Way Motor Co. v. Int'l Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813, 816 (1976); see also Hord v. Envtl. Research Inst. of Michigan, 228 Mich.App. 638, 642, 579 N.W.2d 133, 135 (1998), rev'd on other grounds after remand, 463 Mich. 399, 617 N.W.2d 543 (2000). Failure to prove any one of these elements is fatal to the plaintiff's claim. Ibid. The essence of the plaintiff's claim in count four is that the defendants told him he would be disciplined if he accurately recorded his hours on a time card, which caused him to under-report his hours and thus receive less pay than he actually earned. However, there is no dispute in the present record that the plaintiff's weekly pay did not vary based on hours worked, and the amount of his wages was constant regardless of time spent on the job. The plaintiff's pay was based on a salary, not an hourly wage. Moreover, the plaintiff has not alleged that the defendants made any false representations, only that he was allegedly told to make false representations. Finally, the defendants' representatives acknowledged that the plaintiff was instructed to fill out forty-hour weekly time Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.119 Page 19 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 19 cards, although they assert that the purpose of the cards was to assist in internal accounting and cost tracking. The plaintiff has offered no evidence to refute those assertions. The Court finds, therefore, that the plaintiff has not shown that the defendants made any statement that was false, or that he relied on a false representation, or that the representation was material to the determination of the plaintiff's compensation. The defendants are entitled to summary judgment on court four of the complaint. D. Lastly, the plaintiff alleges that the defendants breached a contract established by the policies set forth in the respective company handbooks for Gonzalez and Raytheon. This claim must be dismissed as to defendant Gonzalez because it is time barred pursuant to the contractually-shortened statute of limitations discussed above. Defendants Raytheon and Jackson argue that these claims should be dismissed because they are based on an employee handbook that the plaintiff never received or read. They also argue that the only claim that may stem from promises in a handbook is a wrongful discharge claim, not a claim based on pay rates. In this case, even if the plaintiff is an exempt employee under the FLSA, the parties are free to contract to pay him an hourly wage with overtime rates for any hours worked over forty per week. Although the plaintiff is not claiming that he was entitled to a just-cause-only standard for termination, the cases discussing contracts based on handbooks are helpful. An employer may enter into contractual relationships with their employees, which limit the employer's ability to fire an employee without a valid reason to do so. Courts have recognized the following three ways by which a plaintiff can prove such contractual terms: (1) proof of a contractual provision for a definite term of employment or a provision forbidding discharge absent just cause; (2) an express agreement, either written or oral, regarding job security that is clear and unequivocal; or (3) a contractual provision, implied at law, where an employer's policies and procedures instill a “legitimate expectation” of job security in the employee. Lytle v. Malady, 458 Mich. 153, 164, 579 N.W.2d 906, 911 (1998). This third method of proving an employment contract is not available in a failure to pay case. Dumas v. Auto Club Ins. Ass'n, 437 Mich. 521, 531, 473 N.W.2d 652, 656 (1991) (holding that “the ‘legitimate expectations' doctrine of Toussaint does not follow traditional contract analysis. Therefore, it does not logically follow that Toussaint should be extended to the area of compensation. Also, since employees' accrued benefits are protected by the presence of traditional contract remedies, there is no need to extend the expectations rationale to compensation”). *23 In an express contract case, “[t]he essential elements of a valid contract are the following: ‘(1) parties competent to contract, (2) a proper subject matter, (3) a legal consideration, (4) mutuality of agreement, and (5) mutuality of obligation.’ “ Hess v. Cannon Twp., 265 Mich.App. 582, 592, 696 N.W.2d 742, 748 (2005) (quoting Thomas v. Leja, 187 Mich.App. 418, 422, 468 N.W.2d 58 (1991)). “ ‘A contract implied in fact arises when services are performed by one who at the time expects compensation from another who expects at the time to pay therefor.’ “ Reed v. Yackell, 473 Mich. 520, 531, 703 N.W.2d 1, 7 (2005) (quoting In re Spenger Estate, 341 Mich. 491, 493, 67 N.W.2d 730 (1954)). “Relevant facts include ‘the type of services rendered, the duration of the services, the closeness of the relationship of the parties, and the express expectations of the parties.’ “ Matter of Estate of Morris, 193 Mich.App. 579, 582, 484 N.W.2d 755, 756 (1992) (quoting In re Lewis Estate, 168 Mich.App. 70, 423 N.W.2d 600 (1988)). “An implied contract cannot be enforced where the parties have made an express contract covering the same subject matter.” Scholz v. Montgomery Ward & Co., Inc., 437 Mich. 83, 93, 468 N.W.2d 845, 849 (1991). The “legitimate expectations” claim referred to in the complaint must be dismissed pursuant to Dumas v. Auto Club Insurance Association because such claims do not apply to compensation, which is what the plaintiff seeks here. Further, the plaintiff cannot prevail on an implied contract claim. “An implied contract cannot be enforced where the parties have made an express contract covering the same subject matter.” Scholz v. Montgomery Ward & Co., Inc., 437 Mich. 83, 93, 468 N.W.2d 845, 849 (1991). The parties here clearly had a contract regarding the plaintiff's compensation. Mr. Bonner sent the plaintiff an email offering him a salary of $1,616 per week plus vacation and benefits. Def. Raytheon's Mot. Summ. J. Ex. 4, Offer. The plaintiff accepted this offer. He cannot Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.120 Page 20 of 21 LaCourse v. GRS III L.L.C., Not Reported in F.Supp.2d (2006) 2006 WL 3694623 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 20 now claim that he had an implied contract regarding compensation. The plaintiff cannot prevail on an express contract theory because he has offered no evidence of an agreement with defendants Raytheon or Jackson to pay him other than according to his salary, which he acknowledged as having received. To the extent that the plaintiff relies on the statement allegedly made by David Bonner, “whatever arrangements you have had with Graham Jackson in the past, just continue that,” the statement is too vague to constitute an enforceable promise. Moreover, that statement is not attributable to Raytheon because Bonner was Gonzalez' employee. Finally, the plaintiff cannot establish a contract implied by Raytheon or Jackson because the undisputed facts do not support such a claim. The plaintiff testified that he had an arrangement with Cosworth for compensatory time, but he never sought payment or other relief from that entity when his employment relationship with it terminated. He testified that when he transferred his employment to Gonzalez he assumed that Gonzalez would honor the arrangement, but that expectation was not based on the conduct of Gonzalez, Raytheon, or Jackson. To the extent that an implied agreement based on an employee handbook is enforceable, the plaintiff has failed to submit any evidence that the defendants' handbooks make such a promise. Moreover, he has not submitted the handbook to which he refers, and he testified at his deposition that he was never given a Raytheon handbook, although he claims to have “reviewed one.” Def. Raytheon's Mot. Summ. J. Ex. 1, LaCourse Dep. at 160. If Raytheon never gave the plaintiff a handbook, any promise contained in it could not have been directed at him. *24 The Court finds, therefore, that the defendants are entitled to summary judgment on count five of the complaint. III. The Court concludes that the undisputed evidence establishes that the plaintiff is an exempt employee, and therefore Raytheon and Jackson's motion for summary judgment will be granted on counts one and two of the complaint. For the reasons discussed above, the Court finds that all defendants are entitled to judgment as a matter of law on the remaining counts. Accordingly, it is ORDERED that the motion for summary judgment by defendants Raytheon Company and Graham Jackson [dkt ′ 15] is GRANTED. It is further ORDERED that the motion for summary judgment by defendant GRS III, L.L.C., doing business as Gonzalez Contract Services [dkt ′ 13] is GRANTED IN PART AND DENIED IN PART. It is further ORDERED that the complaint is DISMISSED WITH PREJUDICE as to defendants Raytheon Company and Graham Jackson, and counts three, four, and five of the complaint are DISMISSED WITH PREJUDICE as to defendant GRS III, L.L.C., doing business as Gonzalez Contract Services. All Citations Not Reported in F.Supp.2d, 2006 WL 3694623 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-4 filed 03/06/17 PageID.121 Page 21 of 21 Exhibit 4 Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.122 Page 1 of 6 Russell v. Citi, Not Reported in F.Supp.2d (2012) 2012 WL 5947450 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by Cannon v. Citicorp Credit Services, Inc., (USA), E.D.Tenn., March 26, 2014 2012 WL 5947450 Only the Westlaw citation is currently available. United States District Court, E.D. Kentucky, Northern Division, at Covington. Keith RUSSELL, Plaintiff v. CITI, Citigroup, Inc., Citicorp Credit Services, Inc., and Does 1-10, Defendants. Civil Action No. 12-16-DLB-JGW. | Nov. 28, 2012. Attorneys and Law Firms Jane G. Rowe, Albuquerque, NM, Michael Shannon Vibbert, Franklin D. Azar, Keith Scranton, Franklin D. Azar & Associates, PC, Aurora, CO, William H. Wilhoit, Grayson, KY, for Plaintiff. Gregory P. Abrams, Katherine E. Kenny, Sari M. Alamuddin, Morgan Lewis & Brockius LLP, Chicago, IL, Michael W. Hawkins, Dinsmore & Shohl, LLP, Cincinnati, OH, Samuel S. Shaulson, Morgan Lewis & Brockius LLP, New York, NY, for Defendants. MEMORANDUM OPINION AND ORDER DAVID L. BUNNING, District Judge. I. INTRODUCTION *1 This is a proposed class action for breach of implied contract, unjust enrichment, and conversion. Plaintiff Keith Russell 1 alleges that his former employers, Defendants Citi, Citigroup, Inc., 2 Citicorp Credit Services, Inc., and Does 1-10, owe him unpaid wages and overtime because they forced him to work before and after his shift, and during rest and meal periods. The Court has diversity jurisdiction over the instant action pursuant to 28 U.S.C. § 1332. This matter is currently before the Court on Defendants' Motion To Dismiss Counts 1, 2, 3, 4, and 6 of the Complaint Under Rule 12(b)(6) (Doc. # 14). This motion is fully briefed and ripe for review. (See Docs. # 14-1, 37, & 42). II. FACTUAL BACKGROUND The following facts are derived from the Complaint and are assumed to be true for the purposes of the instant motion. Plaintiff Keith Russell worked at Defendants' call center in Florence, Kentucky as an hourly employee from August of 2004 to 2009. Plaintiff was paid according to the number of hours he was “logged in” to his phone system. To log in to this system, Plaintiff had to first log in to several computer programs, a task that required up to ten minutes per day. He then had to log out of these programs at the end of his shift, requiring another ten minutes. Plaintiff thus alleges that Defendants forced him to work “off-the-clock” for approximately twenty to twenty-five minutes per day. Plaintiff further alleges that Defendants required him to work through rest and meal breaks. This was allegedly the result of Defendants' “reward structure” which “revolve[d] around non-stop phone time.” (Doc. # 1, at ¶ 25). Those employees who took too much time in between calls, even to use the restroom, were reprimanded or even terminated. According to Plaintiff, Defendants rigorously implemented this practice through its managers. Plaintiff initiated the instant case with the filing of a Complaint on January 12, 2012. (See Doc. # 1). By his Complaint (Doc. # 1), Plaintiff alleges claims for breach of implied contract (Counts I and 2), unjust enrichment (Count 3), conversion (Count 4), unfair wage and hour practices under Kentucky's Wages and Hours Act, K.R.S. § 337.385 (Count 5), and punitive damages (Count 6). By the instant Motion To Dismiss (Doc. # 14), Defendant moves to dismiss all counts except Count 5. For the reasons set forth below, the Court will grant the instant motion as to Counts 1, 2, 4, and 6, and deny it as to Count 3. III. ANALYSIS A. Standard of Review Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.123 Page 2 of 6 Russell v. Citi, Not Reported in F.Supp.2d (2012) 2012 WL 5947450 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Federal Rule of Civil Procedure 8(a) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic Corp. v.. Twombly, 550 U.S. 544, 555 (2007)). In reviewing a Rule 12(b)(6) motion to dismiss, this Court “must construe the complaint in a light most favorable to the plaintiff, and accept all of [his] factual allegations as true. When an allegation is capable of more than one inference, it must be construed in the plaintiff's favor.” Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir.1998) (citations omitted). The Court, however, is not bound to accept as true unwarranted factual inferences, Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987), or legal conclusions unsupported by well-pleaded facts. Teagardener v. Republic-Franklin Inc. Pension Plan, 909 F.2d 947, 950 (6th Cir.1990). *2 To survive a motion to dismiss, the complaint “does not need detailed factual allegations,” Twombly, 550 U.S. at 555, but it must present “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. To satisfy this standard, the complaint must provide “more than labels and conclusions [or] a formulaic recitation of the elements of a cause of action.” Id. at 555. The “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. B. Defendants' Motion To Dismiss (Doc. # 14) 1. Plaintiff's conversion claim (Count 4) is barred by the statute of limitations and his punitive damages claim (Count 6) is not a cause of action. Pursuant to K.R.S. § 413.125, conversion claims are subject to a two-year statute of limitations. Rich & Rich P'ship v. Poetman Records USA, Inc., 714 F.Supp.2d 657, 669 (E.D.Ky.2010). Here, Plaintiff alleges that he ceased working for Defendant in 2009, and did not initiate this case until January 12, 2012. His conversion claim is therefore barred by the applicable statute of limitations. In Count 6, Plaintiff purports to assert a cause of action for “punitive damages” on his conversion claim (Doc. # 1, at ¶ 60; Doc. # 37, at 5, fn. 2). However, punitive damages are a remedy, not a cause of action. In addition, Plaintiff's conversion claim is time-barred as noted above. Therefore, the Court will dismiss Count 6. 2. Plaintiff fails to state a claim for breach of implied contract Kentucky law recognizes the validity of implied-in-fact contracts. BDT Products, Inc. v. Lexmark Intern. Inc., 274 F.Supp.2d 880, 886 (E.D.Ky.2003), aff'd 124 F. App'x. 329 (6th Cir.2005). “A contract implied-in-fact is not an ‘anticipated’ contract but rather a true contract” requiring both mutual assent and definite terms. BDT Products, 274 F.Supp.2d at 886 (citing Kellum v. Browning's Adm'r, 231 Ky. 308, 21 S.W.2d 459, 466 (1929)). It differs from an express contract only in the method of proof required. BDT Products, supra. With an express contract, mutual assent is demonstrated by looking to written or spoken word alone, and the terms and conditions are explicitly set forth. Victor's Ex'r v. Monson, 283 S.W.2d 175, 176- 77 (Ky.App.1955); Dorton v. Ashland Oil & Refining Co., 303 Ky. 279, 281, 197 S.W.2d 274 (1946). With an implied-in-fact contract, mutual assent is inferred from “the circumstances, the conduct, and the acts or relations of the parties,” see Monson, supra, and “one or more of the terms or conditions are implied from the conduct of the parties.” See Dorton, supra. An implied-in-fact contract is also held to a higher standard of proof than an ordinary contract. BDT Products, supra. Mutual assent must be “clearly and convincingly manifest,” “positively definite,” and “mutually understood.” Id. at 886-887. In addition, “the parties must agree on all material and essential terms and leave nothing to be agreed upon as a result of future negotiations.” Id. at 886 (citation omitted). If even one essential term is not agreed upon, no contract has been made. Id. at 887 (citation omitted). *3 In the instant case, Plaintiff asserts that he entered into two separate implied-in-fact contracts with Defendant. In Count 1, he alleges that he contracted to “work for Citi in exchange for payment for all hours worked,” including “off-the-clock” hours. According to Plaintiff, this contract is evidenced by his pay-stubs, the nature of his employment, “other circumstances surrounding the parties' employment relationship,” and “the situation and objective of Citi as an employer.” (Doc. # 1, at ¶ 34). These vague allegations are not evidence of a contract. If they were, all employees would have an implied contract with their employer. As this Court has explained, implied-in-fact contracts require more than just payment for services: Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.124 Page 3 of 6 Russell v. Citi, Not Reported in F.Supp.2d (2012) 2012 WL 5947450 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 “[An implied-in-fact contract] requires stricter proof ... than to establish ordinary contracts-more than proof of performance of the services and casual, indefinite expressions of an intention to pay for same, or acknowledgment of gratitude or dependence on the part of the recipient, or expressions of a wish or desire that the server or attendant should be compensated, for cases of this character are pregnant with danger of spoliation.” BDT Products, supra (quoting Kellum, supra at 464). Simply stated, Plaintiff's pay stubs do not constitute a contract. Count 1 thus fails to state a claim upon which relief can be granted. In Count 2, Plaintiff alleges that he “was contractually entitled to rest and/or meal breaks.” (Doc. # 37, at 5). But the Complaint does not allege that Defendant ever promised Plaintiff rest or meal breaks. In fact, the Complaint alleges exactly the opposite: that throughout the entirety of Plaintiff's employment, Defendant “forced [him] to work ... during [his] rest and lunch periods without compensation for that time.” (Doc. # 1, ¶ 25). Plaintiff alleges that interrupted rest and meal periods were actually so ingrained in “the company's culture” that managers were instructed to encourage employees “not [to] take full rest and meal periods.” (Id. at ¶¶ 25-26). These allegations from the Complaint contradict Plaintiff's assertion that the Parties formed an implied- in-fact contract entitling Plaintiff to rest and meal breaks. When a plaintiff's argument is contradicted by the allegations in his own complaint, that argument is not entitled to a presumption of truth. See, e.g., In re National Century Fin. Enterprises, Inc. Inv. Litig., 604 F.Supp.2d. 1128, 1157 (S.D.Ohio 2009); see also E.F.W. v. St. Stephen's Indian High School, 264 F.3d 1297, 1306 (10th Cir.2001) (refusing “to place significance on bare conclusory allegations” that are “contradicted by the factual allegations” of the complaint). Accordingly, Count 2 also fails to state a claim upon which relief can be granted. Because the Court will dismiss Counts 1 and 2 pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court need not reach Defendants' argument that Counts 1 and 2 are preempted by Kentucky's Wages and Hours Act. 3. The Court will not dismiss Plaintiff's unjust enrichment claim (Count 3) because Defendant has not shown that it fails to state a claim, and because it is not preempted by Kentucky's Wages and Hours Act. *4 Defendants assert that Plaintiff's unjust enrichment claim (Count 3) fails to state a claim under Rule 12(b) (6). However, this assertion fails because Defendants do not support it with any reasoning whatsoever. See, e.g., Bangura v. Hansen, 434 F.3d 487, 498 (6th Cir.2006) (holding that a movant does not carry its burden under Rule 12(b)(6) where it “does not offer a single argument to supports [its] assertion that [the plaintiff] failed to state a claim....”). In the alternative, Defendants argue that Plaintiff's Wages and Hours Act claim preempts his unjust enrichment claim through “field preemption.” However, no Kentucky court has addressed this issue. Thus, as a federal court sitting in diversity, the Court's task is to predict how the Kentucky Supreme Court would rule if it were deciding this question of state law. National Sur. Corp. v. Hartford Cas. Ins. Co., 493 F.3d 752, 755 (6th Cir.2007) (internal citation and quotation omitted). A Kentucky statute may preempt the common law through field preemption. 3 Grzyb v. Evans, 700 S.W.2d 399, 401 (Ky.1985). In contrast to express preemption, 4 field preemption does not require explicit statutory language. Instead, field preemption occurs “[w]here the statute both declares the unlawful act and specifies the civil remedy available to the aggrieved party....” Id.; see also, Hill v. Kentucky Lottery Corp., 327 S.W.3d 412, 421 (Ky.2010). Field preemption does not occur, however, where “the elements of the common law cause [ ] of action bear no resemblance to those intended to be embraced by the [statute].” McDonald's Corp. v. Osborn, 309 S.W.3d 274, 285-86 (Ky.App.2009). Field preemption analysis thus appears to turn largely on whether a common law claim and a statutory claim are “substantially similar.” Id.; see also, State Farm Mut. Auto. Ins. Co. v. Newburg Chiropractic, P.S.C., 683 F.Supp.2d 502, 508 (W.D.Ky.2010) (holding that preemption does not apply “where two statutes or causes of action address different kinds of culpable behavior.”). Here, Defendants argue that the Wages and Hours Act Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.125 Page 4 of 6 Russell v. Citi, Not Reported in F.Supp.2d (2012) 2012 WL 5947450 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 preempts Plaintiff's unjust enrichment claim because (1) both claims are based on the same alleged conduct; and (2) the Act provides Plaintiff a civil remedy. Yet, Defendants fail to cite a single case holding that the Wages and Hours Act preempts any common law cause of action. In fact, only one Kentucky court has analyzed whether the Act preempts the common law at all. In that case, Dodd v. Dyke Industries, Inc., the Western District of Kentucky held that the Act does not preempt common law breach of contract claims. No. 3:04-CV-226-H, 2008 WL 1884081, at *3 (W.D.Ky. Apr. 28, 2008). Defendants do not cite Dodd, nor do they make any attempt to distinguish it from the instant case. Moreover, Defendants do not articulate why they believe that an unjust enrichment claim is “substantially similar” to a Wages and Hours Act claim. See McDonald's, supra. *5 Instead, Defendants cite a litany of cases holding that the Fair Labor Standards Act preempts common law claims seeking unpaid wages and overtime. (Doc. # 14-1, at 5). Those cases are, of course, not mandatory authority. Moreover, they do not appear to be indicative of how the Kentucky Supreme Court would decide this issue. First, nearly all of Defendants' cases found preemption based on the factual similarity between the common law claim and the statutory claim. See Lopez v. Flight Servs. & Sys., Inc., No. 07-CV-6186 CJS, 2008 WL 203028, at *7 (W.D.N.Y. Jan. 23, 2008); Morgan v. Speakeasy, LLC, No. 05-CV- 5705, 2007 WL 2757170, at *24 (N.D.Ill. Sept. 20, 2007); Moeck v. Gray Supply Corp., No. 03-1950, 2006 WL 42368, at *2 (D.N.J. Jan. 2, 2006); Johnston v. Davis Security, Inc., 217 F.Supp.2d 1224, 1227-28 (D.Utah 2002); Sorensen v. CHT Corp., Nos. 03-CV-1609 and 03- CV-7362, 2004 WL 442638, at *7 (N.D.Ill.2004). Since field preemption in Kentucky is based largely on the legal similarity, not the factual similarity, between the common law claim and the statutory claim, see McDonald's Corp. v. Osborn, 309 S.W.3d at 285-86; Newburg Chiropractic, 683 F.Supp.2d at 508, Defendants' cases cannot be relied upon as a bellwether of the Kentucky Supreme Court's future jurisprudence. Second, two of Defendants' cited cases conclude that the FLSA preempts common law breach of contract claims. See Anderson v. Sara Lee Corp., 508 F.3d 181, 194-95 (4th Cir.2007); Lopez v. Flight Servs. & Sys., Inc., supra. According to the Western District of Kentucky's holding in Dodd, the Kentucky Supreme Court is unlikely to reach the same conclusion with respect to the Wages and Hours Act. See Dodd, supra. Therefore, lacking any clear indication of how the Kentucky Supreme Court would decide this issue, this Court is unwilling to predict that the Wages and Hours Act preempts common law unjust enrichment claims. But even assuming arguendo that a Wages and Hours Act claim may sometimes preempt an unjust enrichment claim for unpaid overtime hours, it would be premature to make that finding in this case at this stage in the litigation. In Kentucky, field preemption only applies if the statute provides the plaintiff a remedy. See Grzyb, 700 S.W.2d at 401. For instance, K.R.S. Chapter 344, Kentucky's civil rights statutes, permits a plaintiff to assert a cause of action similar to common law intentional infliction of emotional distress against his employer, but not against his individual managers. See Wilson v. Lowe's Home Center, 75 S.W.3d 229, 239 (Ky.App.2001). Thus, the Kentucky Court of Appeals has held that Chapter 344 only preempts common law IIED claims against one's employer, not one's individual managers. Id. Here, it is unclear that the Wages and Hours Act provides Plaintiff a remedy for his alleged unpaid overtime hours because Plaintiff has not yet established that he is an “employee” entitled to bring a claim under the Act. See K.R.S. § 337.020 (defining the term “employee” for purposes of the Act). If he is unable to establish that fact, the Act will provide him no remedy, and preemption will not apply. *6 For all these reasons, the Court will deny Defendants' challenge to Plaintiff's unjust enrichment claim. IV. CONCLUSION Accordingly, for the reasons stated herein, IT IS ORDERED as follows: (1) Defendants' Motion To Dismiss (Doc. # 14) is GRANTED as to Counts 1, 2, 4, and 6. Those Counts are hereby DISMISSED WITH PREJUDICE; and (2) Defendants' Motion To Dismiss (Doc. # 14) is DENIED as to Count 3. All Citations Not Reported in F.Supp.2d, 2012 WL 5947450 Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.126 Page 5 of 6 Russell v. Citi, Not Reported in F.Supp.2d (2012) 2012 WL 5947450 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Footnotes 1 Russell's co-plaintiff, Krista Bergman, voluntarily dismissed her cause of action against Defendants on April 30, 2012. (See Doc. # 36). 2 Defendants assert that “Citi and Citigroup, Inc. are not proper defendants in this matter because they are not [Plaintiff's] employer.” (Doc. # 14-1, at 1 fn. 1). They cite the Declaration of Beth Edwards (Doc. # 15-2), a human resources employee who alleges that Plaintiff was employed by Citicorp Credit Services, Inc. alone. However, Citi and Citigroup, Inc. have not filed a motion to be dismissed from this action. 3 The Court notes that Kentucky courts have applied field preemption sparingly. See, e.g., Foster v. Kentucky Farm Bureau Mut. Ins. Co., 189 S.W.3d 553, 557 (Ky.2006) (holding that the Kentucky Motor Vehicle Reparation Act, K.R.S. § 304.39, et seq. preempts general insurance law because it is a “comprehensive act” which establishes tort remedies, regulates insurers, and provides the penalties insurers must pay if they violate the act); see also Meyers v. Chapman Printing Co., 840 S.W.2d 814, 820-21 (Ky.1992) (holding that Kentucky's workers' compensation statute preempts common law tort claims, but not statutory civil rights claims); Wilson v. Lowe's Home Center, 75 S.W.3d 229, 239 (Ky.App.2001) (holding that intentional infliction of emotional distress claims against the plaintiff's employer were preempted by K.R.S. Chapter 344, Kentucky's civil rights statutes); Kroger v. Buckley, 113 S .W.3d 644, 646-47 (Ky.App.2003) (same). 4 To expressly preempt the common law, a state statute must use language that is both “clear and expressed.” Commonwealth Natural Res. & Envtl. Prot. Cabinet v. Neace, 14 S.W.3d 15, 19 (Ky .2000) (citation omitted). This principle is also enshrined in Section 233 of the Kentucky Constitution, which provides that “the common law remains in effect until repealed or clearly altered by a specific legislative act.” Id. (paraphrasing Section 233 of the Kentucky Constitution). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-5 filed 03/06/17 PageID.127 Page 6 of 6 Exhibit 5 Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.128 Page 1 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 1992 WL 677502 United States District Court, W.D. Michigan. Jacqueline GREENE, Plaintiff, v. The STANDARD REGISTER COMPANY, a foreign corporation, Defendant. No. 1:91 CV 204. | Nov. 18, 1992. Attorneys and Law Firms H. Rhett Pinsky, Pinsky, Smith, Fayette & Hulswit, Grand Rapids, MI, for plaintiff Jacqueline Greene. Charles S. Mishkind, Deborah M. Derby, Miller, Canfield, Paddock & Stone, Grand Rapids, MI, for defendant Standard Register Co., a foreign corp. OPINION ROWLAND, United States Magistrate Judge. *1 This matter comes before the Court on Defendant's Motion for Summary Judgment, filed August 10, 1992 (dkt. # 44). Plaintiff filed her Brief in Opposition to Defendant's Motion for Summary Judgment on September 15, 1992. Subsequently, both parties have filed Supplemental Briefs in this Court. Oral argument was heard on defendant's motion on November 10, 1992. Accordingly, defendant's motion has been fully briefed and argued, and is ready for decision. On September 28, 1992, both parties consented to proceed before me for all further proceedings, including trial and entry of an order of final judgment. 28 U.S.C. § 636(c)(1). By Order of Reference, the Honorable Richard A. Enslen referred this case to me on October 2, 1992. Plaintiff filed this lawsuit in state court. Thereafter, on February 28, 1991, defendant removed the case to the United States District Court for the Western District of Michigan. On March 6, 1991, plaintiff filed her First Amended Complaint. Plaintiff asserts three counts as causes of action: Violation of the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-34; violation of Michigan's Elliott-Larson Civil Rights Act, M.C.L. § 37.2202; and breach of contract. I. FACTUAL BACKGROUND Viewed in the light most favorable to plaintiff, the non- moving party, the facts establish that she was hired as a secretary by defendant on December 20, 1983. Her birth date is July 10, 1934. Prior to her hire, plaintiff completed an application for employment. Both the beginning and the end of the employment application contains language that giving false information or making misrepresentations or omissions of facts may lead to rejection of the applicant or immediate dismissal after employment. The employment application has three separate columns. In the middle column, an applicant is required to list prior full-time jobs only, specifying the reason the applicant left the employer. In the third column, the applicant is required to list prior part-time jobs. For full-time work, plaintiff listed as previous employers Forest Hills Public Schools from December, 1978 through November, 1980; John M. Perry Company from October, 1977 through December, 1978; Sefton Associates from October, 1970 through October, 1977; and Popular Mechanics Company from June, 1957 through May, 1960. In reality, plaintiff did not work full-time for Sefton Associates or John M. Perry Company. A letter from Sefton Associates to defendant establishes that plaintiff was never employed by Sefton, and any work she performed was in the capacity of an independent contractor. In her deposition, plaintiff admitted the work she performed for Sefton Associates was part-time and sporadic. Plaintiff did not work for John M. Perry Company full-time. She admitted in her deposition and affidavit she only worked five hours a day, and that this was part-time work, consisting of only 25 hours per week. An affidavit from Don Perry of the John Perry Company establishes she worked as an independent contractor on a part-time basis, setting her own hours and billing the John M. Perry Company for her time. She was not covered by the terms or conditions of employment applied to other employees of the John M. Perry Company. *2 Furthermore, plaintiff did not work full-time for the Forest Hills Public Schools. By letter dated August 25, 1980, Kenneth Walcott, Assistant Superintendent for Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.129 Page 2 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 Personnel, informed plaintiff her half-time secretarial position in the processing department was being eliminated. In her application, plaintiff identified she left Forest Hills Schools in November, 1980, because her position was eliminated. In reality, her position was eliminated in August, 1980. Thereafter, she was offered, and accepted a position as media clerk in the high school. She worked in this position for one week. She quit because she did not feel she could handle the job. This quit occurred in November, 1980. Plaintiff failed to alert defendant she quit her job at Forest Hills Public Schools. Finally, in early 1981, plaintiff worked for a period of approximately three weeks for Witte Travel Agency. She quit this job. She did not inform defendant of the fact she ever worked for Witte Travel Agency, or that she quit this job. After plaintiff's hire, she received performance appraisals in 1984 through 1989. All these appraisals indicate she was performing well. In 1989, she was promoted to office supervisor. The office consisted of eleven employees: district sales manager, Mike Momenee; plaintiff; Beverly Willits, a part-time office clerk; Pat Menck, a forms designer; and seven sales representatives. Plaintiff's employment history was not without incidents. In 1988, she was involved in a series of incidents with a fellow employee. Momenee eventually issued a warning to both, that further conflicts would lead to immediate dismissal. By letter to Momenee dated November 11, 1988, plaintiff agreed to comply with Momenee's directive. In February, 1990, plaintiff alleges an incident occurred in the office which adversely affected her employment relationship with Momenee. On a Saturday afternoon, either February 10 or 17, plaintiff went in to work. She alleges that upon entering a room, she observed Momenee and a female sales representative in a compromising position. Momenee's zipper was open, and the female sales representative was sitting with a towel on her lap. Plaintiff asserts she then closed the door and went into the computer room. In a matter of minutes, Momenee came to see plaintiff. He reminded her she had a good job with benefits, and that her husband was ill. Momenee did not directly threaten plaintiff, however. Momenee vigorously denies that this incident ever occurred. On March 22, 1990, plaintiff left work due to an illness. Her condition was assessed as a viral syndrome and pleuritis. Plaintiff did not go to work the next day, nor did she call in. When Momenee called plaintiff to inquire why she was not at work, plaintiff's husband informed Momenee he and plaintiff were both ill. The following Monday, March 26, 1990, plaintiff once again missed work. She alleges she still was ill. She never called in sick to work. The following day she came in to work. She alleges Momenee told her, “Dick Niemeyer wants you gone. He wants you out of here by April 27. You have until then to look for another job.” Plaintiff asserts she inquired why she was being discharged, to which Momenee replied it was because of her age. Defendant denies this was ever said. Plaintiff alleges Momenee stated, “I don't like you. You are an unhappy person and I and others in the office feel a younger person would be more suitable in your job.” She alleges she inquired whether he had grounds to fire her, to which he replied no, but that she should look for a job more suitable for her age and temperament. Defendant denies this was ever said. It is uncontroverted that prior to March 27, 1990, no references to plaintiff's age were ever made by anyone employed by defendant. *3 On April 2, 1990, plaintiff consulted a lawyer, Michael Sefton, regarding her pending discharge. Plaintiff has submitted Sefton's notes for this Court's review. In these notes, plaintiff asserted the reasons for her discharge were her illness without authorization, difficulty getting along with staff and management, and inability to get along with her supervisor. She asserted the cause of the discomfort between she and Momenee was her discovery of Momenee's “affair.” She further asserted that within two months of her discovery, Momenee had started a campaign against her, using as a pretext the issues of her age, that a younger and more outgoing person was needed, and that plaintiff was too unhappy and reserved for her job. Plaintiff was finally terminated from defendant's employment on April 27, 1990. The stated reason for her discharge was the fact she failed to call in sick on Friday, March 23 and Monday, March 26, 1990. Michael Momenee signed the discharge form on April 27, 1990, and Richard Niemeyer signed on May 7, 1990. Subsequent to her termination, plaintiff was hired on July 15, 1992, by General Rehabilitation Services, Inc., as a receptionist/secretary. She worked at General Rehabilitation Services for one week, from July 15-19, 1991. There is a dispute over the reasons for plaintiff's quitting her employment with General Rehabilitation Services. Plaintiff asserts she had to due to her mother's Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.130 Page 3 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 illness. General Rehabilitation Service noted on its Personnel Action Notice that plaintiff called in to quit on July 19, 1991, stating she did not like the job. II. SUMMARY JUDGMENT STANDARDS In reviewing a motion for summary judgment, this Court should only consider the narrow questions of whether there are “no genuine issue[s] as to any material fact and [whether] the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). On a Rule 56 motion, the Court cannot try issues of fact, but is empowered to determine only whether there are issues in dispute to be decided in a trial on the merits. Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987); Atlas Concrete Pipe, Inc. v. Roger J. Au & Son, Inc., 668 F.2d 905, 908 (6th Cir.1982). The crux of the motion is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir.1989). A motion for summary judgment requires this Court to view “inferences to be drawn from the underlying facts ... in the light most favorable to the party opposing the motion.” Matsushita Electric Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); Historic Preservation Guild of Bay View v. Burnley, 896 F.2d 985, 993 (6th Cir.1989). The opponent, however, has the burden to show that a “rational trier of fact [could] find for the non-moving party [or] that there is a ‘genuine issue for trial.’ ” Historic Preservation Guild of Bay View v. Burnley, 896 F.2d at 993 (quoting Matsushita Electric Ind. Co. v. Zenith Radio Corp., 475 U.S. at 587). *4 As the Sixth Circuit has recognized and heartily supported, recent Supreme Court decisions have encouraged the granting of summary judgments. Historic Preservation Guild of Bay View v. Burnley, 896 F.2d at 993 (citing Celotex Corp v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)). Courts have noted that the summary judgment motion may be “an appropriate avenue for the ‘just, speedy and inexpensive determination’ of a matter.” Cloverdale Equip. Co. v. Simon Aerials, Inc., 869 F.2d 934, 937 (6th Cir.1989) (quoting Celotex Corp. v. Catrett, 477 U.S. at 327). Consistent with the concern for judicial economy, “the mere existence of a scintilla of evidence in support of the [non-moving party's] positions will be insufficient.” Anderson v. Liberty Lobby, Inc., 477 U.S. at 252. Mere allegations do not suffice. Cloverdale Equip. Co. v. Simon Aerials, Inc., 869 F.2d at 937. “[T]he party with the burden of proof at trial is obligated to provide concrete evidence supporting its claims and establishing the existence of a genuine issue of fact.” Id. III. ANALYSIS Defendant raises several issues in its Motion for Summary Judgment. Defendant asserts plaintiff is barred from all relief because she misrepresented her employment history on her employment application, that she fails to make out a prima facie case of age discrimination, that she has failed to show defendant's legitimate reasons for discharging plaintiff were pretextual, that plaintiff should be barred from relief in this case because she failed to follow defendant's internal grievance procedure, that she fails to establish she was not an at-will employee, and that her claim for relief should be limited because she has failed to mitigate her damages. I shall address each of defendant's arguments in turn. A. Employee Misconduct Defendant argues that according to the recent Sixth Circuit decision in Johnson v. Honeywell Info. Sys., Inc., 955 F.2d 409 (6th Cir.1992), plaintiff's claim is barred. In Johnson, the Sixth Circuit adopted the analysis and holding of Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d 700 (10th Cir.1988). Evidence acquired after discharge, showing misconduct on the part of the discharged employee, is relevant to the claim of injury. Id. at 708; Johnson v. Honeywell Info. Sys., Inc., 955 F.2d at 415. Accordingly, the discharged employee is precluded from obtaining a remedy under federal civil rights laws, even if the discharge was based upon unlawful considerations. Johnson v. Honeywell Info. Sys., Inc., 955 F.2d at 415; see also Milligan-Jensen v. Michigan Tech. Univ., 975 F.2d 302, 304 (6th Cir.1992); Dotson v. United States Postal Serv., 961 F.2d 1576 (6th Cir.) (unpublished opinion), cert. denied, --- S.Ct. ---- (1992); Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d at 708. Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.131 Page 4 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 In Johnson, the Sixth Circuit was evaluating the issue of whether after acquired evidence of employee misconduct barred a claim of relief based upon state law claims for wrongful discharge in violation of the Elliott-Larson Civil Rights Act. In Summers, the case the Sixth Circuit relied upon, the Tenth Circuit was deciding a case in which the cause of action was based upon the Age Discrimination in Employment Act. My review of the post-Summers case law indicates the after acquired evidence principle has been applied to cases alleging gender discrimination, Milligan-Jensen v. Michigan Tech. Univ., 975 F.2d 302 (6th Cir.1992); retaliatory discharge, Id.; and racial discrimination, Washington v. Lake County, 969 F.2d 250 (7th Cir.1992). Therefore, should defendant establish there are no genuine issues of material fact that plaintiff would not have been hired had defendant known of the discrepancies or misrepresentations in her employment application, or if she had been hired she would have been discharged once defendant became aware of the misrepresentations, all of plaintiff's claims for relief shall be barred, and judgment shall be entered for defendant. *5 In cases involving falsified or misrepresented employment applications, the employer is entitled to judgment as a matter of law if the misrepresentation or omission was material; the information was directly related to evaluating the prospective employee for employment; and was relied upon by the prospective employer when making its decision to hire. Milligan- Jensen v. Michigan Tech. Univ., 975 F.2d at 304; Johnson v. Honeywell Info. Sys., Inc., 955 F.2d at 414. The misrepresentations are material if the employer relied upon them in order to make the hiring decision. The company will have relied on the misrepresentations if it would not have hired the employee had it known of the misrepresentations. Johnson v. Honeywell Info. Sys., Inc., 955 F.2d at 414. Defendant has submitted two affidavits in support of its Motion for Summary Judgment. Thomas Powal, presently the Account Director in defendant's central district, attests that he was district sales manager in Grand Rapids when plaintiff filed her application for employment. Powal further attests it was his responsibility to decide whether or not to hire plaintiff as a full- time receptionist/secretary. Powal attests that if plaintiff had accurately portrayed her employment history on her application, he would not have hired her because she quit her most recent jobs. Powal's affidavit has not been rebutted. Accordingly, defendant relied on plaintiff's misrepresentations in her application, and her misrepresentations were material. The question thus becomes whether plaintiff's misrepresentations or omitted information are directly related to measuring her for employment. In an attempt to avoid the holding in Johnson, plaintiff argues that the discrepancies between her employment history and what she set forth in her employment application are minor and trivial, and the misrepresentations must apply to her qualifications to perform the job she applied for, not her past experience. On the other hand, defendant attests it considers misrepresentations and omissions to be dishonest, which will not be tolerated. Furthermore, someone who is less than honest or truthful will not be hired, and will be fired upon discovery of the misrepresentations or falsifications. (Powal affidavit at p. 4; Alexander affidavit at p. 2). Case law supports the proposition that “[i]ntegrity, honesty, and a concerted effort in one's duties are legitimate qualifications to demand of any employee in any position....” Grier v. Casey, 41 F.E.P. Cases 1259, 1267 (W.D.N.C.1986); see also, Mathis v. Boeing Military Airplane Co., 719 F.Supp. 991, 995 (D.Kan.1989). Josephine Alexander attests defendant's policy is to discharge any employee discovered to have falsified or misrepresented facts on an employment application. (Alexander affidavit at p. 2). This fact, if uncontroverted, will support an entry of judgment as a matter of law in favor of defendant. Bonger v. American Water Works, 789 F.Supp. 1102, 1106 (D.Colo.1992). *6 Plaintiff also argues her misrepresentations (or discrepancies) are minor and trivial. In her affidavit, she attests she had no intent to misrepresent her qualifications, and that she does not believe she materially misrepresented her qualifications or omitted any material fact relevant to her hire by defendant. (Greene affidavit at p. 2). Viewed individually, it is arguable that each omission from plaintiff's employment application did not detract, in an overly substantial way, from an accurate portrayal of her past experience and qualifications. However, when viewed in total, plaintiff's actual job history differs immensely from her purported job history. As represented, plaintiff had a seamless period of full- time employment from October, 1970 through November, 1980, and that her employment with the Forest Hills Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.132 Page 5 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 Public Schools was eliminated due to elimination of her position. Thereafter, she worked part-time with temporary service companies. As represented, not once during that time period had she quit a job. In reality, from 1970 through 1976, she worked two part-time jobs, only one of which she listed on her application- with Sefton Associates, and this was listed as full-time. (Plaintiff Deposition, p. 29, 33). Thereafter, from October, 1977 through December, 1978, she worked at the John Perry Company, at most 25 hours per week. (Plaintiff Deposition at 32; plaintiff affidavit; Don Perry affidavit). She also listed her employment with the John Perry Company as full-time employment. Furthermore, plaintiff did not work full-time at the Forest Hills Public Schools as she represented on her application for employment. Plaintiff wholly failed to notify defendant she had worked for the Witte Travel Agency for a period of three weeks in 1981, and it necessarily follows defendant was not notified she quit this job. Finally, plaintiff did not advise defendant she had in fact quit her job at Forest Hills Public Schools, instead representing her position had been eliminated. Viewed in total, then, plaintiff's seamless record of continuous full-time employment for ten years, without any quits from her jobs, becomes a record of no full-time employment, with two recent incidents where she quit her job. Although plaintiff attested she did not believe her omissions and mischaracterizations of her work history misrepresented her qualifications, at an earlier date she testified during a deposition that she had created an incomplete and not totally accurate picture of her employment history. (Plaintiff Deposition at 177-78). Plaintiff's argument that this Court find her misrepresentations to be trivial and minor, and therefore as a matter of law not material, is problematic for a fundamental reason. In her attempt to avoid summary judgment, plaintiff has submitted an affidavit in which she focuses on her own belief that the misrepresentations were not material, that she had no intent to misrepresent her qualifications, and that she does not believe she has done so. As such, plaintiff requests this Court to make the material misrepresentation analysis on the basis of her own subjective viewpoint. This is contrary to the developing case law, which requires a court to ascertain what the employer would have done, either pre- or post-hire, had it been aware of the employee's misrepresentations or misconduct. See e.g., Summers v. State Farm Mut. Auto. Ins. Co., 864 F.2d at 706 (employer may avoid liability by showing “that the adverse employment action would have been taken even in the absence of the impermissible motivation, and therefore the discriminatory animus was not the cause of the adverse employment action.”) (quoting Blalock v. Metals Trades, Inc., 775 F.2d 703, 712 (6th Cir.1985), cert. denied, 490 U.S. 1064 (1989)). *7 Assuming arguendo plaintiff's omissions and misrepresentations are minor and trivial, the relevant issue in determining whether the misrepresentation or omission was directly related to measuring an applicant for employment is how defendant subjectively views these actions, as evidenced by affidavits and, whenever possible, how defendant had responded in the past to similar situations. Accordingly, defendant must provide proof, by way of affidavit or otherwise, of its policies and/ or practices with respect to employees discovered to have omitted or misrepresented facts on an employment application. See Bonger v. American Water Works, 789 F.Supp. at 1106-1107; O'Day v. McDonnell Douglas Helicopter Co., 784 F.Supp. 1466, 1468-69 (D.Arizona 1992); O'Driscoll v. Hercules, Inc., 745 F.Supp. 656, 658- 59 (D.Utah 1990). By requiring such proof, a court is ensured an employer cannot avoid liability through post- hoc combing through an employee's file “for evidence of any and all misrepresentations, no matter how minor or trivial.” Johnson v. Honeywell Info. Sys., Inc., 955 F.2d at 414. Furthermore, this prevents a court from indulging in fine line drawing to define at what point a misrepresentation is sufficiently de minimis that the employer would not have dismissed the employee had the misconduct been known. Plaintiff's argument that her conduct was minor and trivial, and therefore should not bar relief, has been considered by other courts, and rejected. See e.g., O'Driscoll v. Hercules, Inc., 745 F.Supp. at 658-59; Mathis v. Boeing Military Airplane Co., 719 F.Supp. at 994-95. Certainly, if plaintiff had committed actions which clearly were egregious, and this Court would concur that a reasonable employer would discharge an employee for these actions, plaintiff would not or could not concede this would bar relief if defendant had a history of failure to discipline similarly situated employees. In like fashion, the actions for which an employee is punished may appear picayune, but the federal anti-discrimination in employment laws are not violated if all employees are subject to the same rule. Blalock v. Metal Trades, Inc., 775 F.2d at 712. Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.133 Page 6 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 Plaintiff challenges the affidavit of Powal as inadequate and self-serving. Plaintiff's argument that the affidavit is self-serving, and therefore should be given little if any weight, has been rejected by other courts, and this one sees no reason to do otherwise. Bonger v. American Water Works, Inc., 789 F.Supp. at 1107; O'Driscoll v. Hercules, Inc., 745 F.Supp. at 659. In response to plaintiff's argument, defendant has produced the affidavit of Josephine Alexander, the Human Resources Administration Director for defendant. She attests that it is defendant's “firm and uniform” policy to discharge employees discovered to have falsified or misrepresented facts on an employment application. This is so even if the underlying misrepresentation appears relatively minor. Attached to Alexander's affidavit are five examples of employees who had been discharged previously for falsifying or misrepresenting facts on hiring documents. These instances include misrepresenting the employee was a college graduate, stating the employee had no prior back injuries or worker's compensation claims; falsification of previous employment dates (on October 29, 1990, he had stated he was still employed, whereas his prior employment had been terminated on October 8, 1990); and two instances where the employee stated he had no relative working at defendant, while in reality brother-in- laws were employed there also. *8 There is no issue of fact that plaintiff made misrepresentations by omitting information from her employment application. Defendant has established that on past occasions, when presented with similar situations, it had terminated the employment of employees who had falsified or made misrepresentations on their employment applications. It was incumbent on plaintiff to generate an issue of fact that defendant did not follow such a policy. O'Driscoll v. Hercules, Inc., 745 F.Supp. at 660. Plaintiff has not done so, instead arguing she believes she did not deceive defendant. This assertion is not relevant to the ultimate issue of whether defendant believed the information to be relevant and material, whether it relied on it, and what it would have done once it became aware of plaintiff's misrepresentations. By affidavit and documentary evidence, defendant has shown there is no genuine issue of material fact that honesty and candor are directly related by defendant to measuring a candidate for continuing employment. The employment application clearly separates into distinct columns the areas for an applicant to list full-time and part-time work. The importance to defendant of an applicant's past job experience is self-evident. Defendant has met the test set forth by the Sixth Circuit in Johnson, and therefore summary judgment is appropriate. In the alternative, plaintiff argues her damages should be limited to those which arose prior to the date defendant discovered the misrepresentations and omissions on her employment application. Plaintiff bases her argument on the cases of Milligan-Jensen v. Michigan Tech. Univ., 767 F.Supp. 1403 (W.D.Mich.1991) and Washington v. Lake County, 969 F.2d 250 (7th Cir.1992). However, two days after plaintiff filed her brief, the Sixth Circuit reversed Judge Hillman's decision in Milligan-Jensen. Milligan-Jensen v. Michigan Tech. Univ., 975 F.2d 302 (6th Cir.1992). This decision by the Sixth Circuit compels this Court to reject plaintiff's argument. Finally, plaintiff asserts a policy-based argument that this Court recognize employee misconduct as a bar to wrongful discharge and discrimination claims only in those cases involving fraud leading to convictions, discharges and educational qualifications. My review of the developing case law on the subject would lead me to reject plaintiff's argument even if I already had not declined plaintiff's invitation to adopt a “minor and trivial” standard for reviewing an employer's employment decisions, irrespective of the fact they are applied in an even-handed and neutral manner and not based on an impermissible animus. B. Substantive Merits of Plaintiff's Age Claims Irrespective of the fact I shall grant defendant judgment on the basis plaintiff is not entitled to relief due to her omissions and mischaracterizations on her employment application, I shall address the other arguments defendant asserts in support of its motion for summary judgment. *9 Under Michigan's Elliott-Larson Civil Rights Act, a plaintiff asserting a claim of intentional discrimination must establish the following: 1) That she is a member of the affected class; 2) that an adverse employment action was taken against her; 3) that the person responsible for the adverse action was predisposed to discriminate against persons in this affected class; and 4) that the person responsible for the adverse action actually acted on the predisposition with regards to plaintiff. McDonald v. Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.134 Page 7 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 Union Camp Corp., 898 F.2d 1155, 1160-61 (6th Cir.1990) (citing Matras v. Amoco Co., 424 Mich. 675, 385 N.W.2d 586 (1986)). Defendant argues plaintiff fails to meet this test as a matter of law, because the decision to terminate her employment was made by Richard Niemeyer, while the person whom plaintiff alleges exhibited the improper animus against her was Michael Momenee, the district sales manager. The deposition testimony of Richard Niemeyer casts into doubt this assertion. In his deposition, Niemeyer testified he and Momenee discussed plaintiff's situation on numerous occasions prior to her discharge. Although he does not recall any conversation he had with Human Resources regarding plaintiff's situation, Niemeyer does recall that Momenee did have such conversations. Furthermore, the form used by defendant to terminate plaintiff's employment was signed by Momenee on April 27, 1990, and by Niemeyer on May 7, 1990. Despite Momenee's claims to the contrary, a genuine issue of fact remains whether it was he or Niemeyer who actually terminated plaintiff's employment. Defendant also asserts plaintiff has not made out a prima facie case of age discrimination. However, a plaintiff claiming employment discrimination is not required to establish a prima facie case when there is direct evidence of discrimination. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 121 (1985); Ang v. Proctor & Gamble Co., 932 F.2d 540, 549 (6th Cir.1991). When there is direct evidence the analysis shifts, and defendant must articulate a legitimate, non-discriminatory reason for its employment decision. If this is done, the burden rests upon plaintiff to prove the reasons offered by defendant were merely a pretext for its discriminatory actions. See e.g., Ang v. Proctor & Gamble Co., 932 F.2d at 549; Ridenour v. Lawson Co., 791 F.2d 52, 56 (6th Cir.1986). Throughout this process, the burden always rests upon plaintiff to prove that age was a factor in defendant's personnel decision. Chappell v. GTE Prod. Corp., 803 F.2d 261, 266 (6th Cir.1986), cert denied, 480 U.S. 919 (1987). Direct evidence of discrimination includes statements allegedly made by the employer. See e.g., Buckley v. Hospital Corp. of America, Inc., 758 F.2d 1525, 1530 (11th Cir.1985) (expression of supervisor over longevity of staff members, that employer needed “new blood,” that younger nurses would be recruited, and comments regarding the plaintiff's advanced age); see also Castle v. Sangamo Weston, Inc., 650 F.Supp. 252, 269-70 (M.D.Fla.1986) (collecting and analyzing cases). In this case, plaintiff has testified Momenee informed her she was too old, and that he and other people in the office felt a younger person should have her job. (Plaintiff deposition at 322). She further testified he informed her to look for a job more suitable for a person her age and temperament. (Plaintiff deposition at 325). Accordingly, she has produced direct evidence of age discrimination, and it was incumbent upon the defendant to articulate a legitimate business purpose for the termination of plaintiff's employment. Defendant has done so, arguing plaintiff was discharged for violating policy as well as her attitude. Plaintiff concedes this point. However, she argues a genuine issue of fact exists whether the purported reason for her discharge was merely a pretext for the real purpose, her age. *10 Plaintiff argues the fact that Momenee made the statements attributed to him; the fact she was never placed on a performance improvement plan when her performance or conduct was unsatisfactory, while other younger employees were; and the reason given for her discharge is trivial, are sufficient to create a genuine issue of fact for a jury to resolve. However, mere statements in isolated circumstances are insufficient for an age discrimination claimant to carry her burden of proof regarding pretext. Gagne v. Northwestern Nat'l. Ins. Co., 881 F.2d 309, 314 (6th Cir.1989); Chappell v. GTE Prod. Corp., 803 F.2d at 268 n. 2. Plaintiff's observation that younger employees were placed on performance improvement plans, while she was not, has little if any probative force. By affidavit, plaintiff attests that as district secretary and office supervisor from December 20, 1983 through April 27, 1990, she typed up an unspecified number of performance improvement plans. She asserts that because she was not placed on such a plan, a finder of fact could infer this was due to her age. Accompanying this affidavit is such a plan, dated December 22, 1989, to a salesperson named Peggy Taylor. Significantly, the language in this document starts as follows: “As you know, good morale for each sales representative, as well as the collective positive morale of the district, is essential for long-term success.” It thus appears that performance improvement plans were used for sales representatives. This perception is bolstered by the fact plaintiff was disciplined by Momenee in November, 1988, when he wrote a letter to both plaintiff and her antagonist. In this letter, Momenee indicates he had talked to plaintiff and her fellow employee about Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.135 Page 8 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 their problems on separate occasions. By letter dated November 11, 1989, plaintiff informed Momenee she would comply with the terms set forth in his letter. Plaintiff's assertion that her different treatment reflects age discrimination on the part of Momenee is thus tenuous at best. In like fashion, plaintiff's conclusions that defendant's stated reasons for discharging her are trivial are entitled to no weight. “Mere personal beliefs, conjecture and speculation are insufficient to support an inference of age discrimination.” Chappell v. GTE Prod. Corp., 803 F.2d at 268. On the other hand, defendant has produced evidence to support its claim that age was not a determining factor in terminating plaintiff's employment. Defendant's standard work rules, which are not exhaustive, provide for discipline, including discharge, for interfering with others by words, use of abusive language, and excessive absenteeism. In his deposition, Momenee testified that plaintiff's failure to call in the two days she was ill, in light of the conflict she had with other employees over a period of time, was “the straw that broke the camel's back.” (Momenee deposition at 222). He further testified age was not a factor in his decision to terminate plaintiff's employment. (Id. at 250). Momenee's assertion that interoffice conflicts were part of the reason plaintiff was discharged is supported by his November 10, 1988, memorandum to plaintiff, warning that she would be terminated immediately if she was involved in anymore conflicts with fellow employees. The fact that she failed to call in absent to work on two days prior to her discharge is not in dispute. *11 Plaintiff's claim Momenee had an anti-age bias is further harmed by the fact that after her discharge, her job as secretary was offered to Beverly Willits, a former full- time employee, then working part-time. Beverly Willits was over 60 years old. (Id. at 226-27). When Willits did not accept this job offer, plaintiff's prior position was filled by Sue MacLachlan, then in her forties. (Id. at 223). As such, a person from plaintiff's protected class was hired to replace her. Gagne v. Northwestern Nat'l. Ins. Co., 881 F.2d at 313. Even more damaging to plaintiff's claim of age discrimination are the allegations she made prior to instituting this lawsuit that the real reason she was discharged was her discovery of an office affair Momenee was involved in. Defendant, in particular Michael Momenee, vigorously disputes plaintiff's allegation of sexual impropriety. However, relevant to this analysis is plaintiff's early assertion this was the reason behind her discharge, not her age. On April 2, 1990, plaintiff advised her attorney, Michael Sefton, of her observation of Momenee's office “affair.” After she left the room where she alleges she saw Momenee in a compromising position, he confronted her, making references to the fact she had a good job and benefits, as well as a husband who was ill. Finally, she asserted that within a month Momenee started a campaign against her employment, using age as a reason she would be discharged. Plaintiff's opinion of the events have remained unchanged, and were supplemented in her deposition taken in May and June, 1992. She testified it was her belief the alleged incident with Momenee was a major connection to her ultimate discharge. (Plaintiff deposition at 112). She testified the cause of the discomfort between she and Momenee was her learning of the affair. (Id. at 309). Finally, she twice testified that prior to March 27, 1990, neither Momenee nor anyone else in defendant's employment ever referred to her age. (Id. at 85, 319). Plaintiff's assertions, coupled with Momenee's refutations, presents this Court with a rather anomalous situation. Plaintiff is proffering, and defendant is disputing, a purported reason for her discharge, i.e., her discovery of an office affair, which although someone might find offensive, would not provide grounds for an age discrimination claim. Furthermore, plaintiff is alleging that Momenee's remarks about her age, which were not made until one month after plaintiff's “discovery,” indicate pretext masking the reason underlying her discharge. In other words, in her affidavit as well as deposition testimony, plaintiff has transposed the underlying purpose and pretext which would be asserted ordinarily in an age discrimination claim. In response to plaintiff's allegations, defendant argues that the decision in Galbraith v. Northern Telecom, Inc., 944 F.2d 275 (6th Cir.1991), cert. denied, 503 U.S. 945, 112 S.Ct. 1497 (1992), compels the grant of summary judgment. In Galbraith, the plaintiff was asserting she was discharged because of her association with a fellow employee who was an African-American. However, in her complaint plaintiff also alleged the reason she was terminated was she was shot on company property, her assailant was described as a black male, and she would not identify him as a black fellow employee Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.136 Page 9 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 she had dated previously, despite the attempts of the company to coerce her to make this identification. Id. at 281. The facts otherwise strongly pointed to her ex- boyfriend as the assailant. Id. at 277-78. The Sixth Circuit looked beyond Galbraith's allegations of racial animus, concluding “[i]n short, Galbraith was discharged because of her association with Hunter's violence. It was not the interracial aspect of her association with Hunter that led to her dismissal, but its demonstrated propensity to erupt into violence threatening the safety and lives of Northern Telecom personnel.” Id. at 281. Defendant asserts this case stands for the proposition that admissions, by a plaintiff alleging discrimination in employment, that the real reason behind the discharge was not based upon impermissible considerations, bar that plaintiff's claim. In response, plaintiff argues Galbraith is inapplicable to the case sub judice, because in that case there was no direct evidence of discrimination. Plaintiff also argues that plaintiff's state of mind is only relevant to the issue of pretext. *12 I conclude plaintiff's admissions that the reason behind her discharge was her “discovery” of Momenee's interoffice “affair” does not, ipso facto, lead to the conclusion defendant should be granted judgment. The Sixth Circuit did not explicitly enunciate such a broad principle of law, and neither has any other court in light of the Galbraith decision. I decline to accept the conclusion which defendant urges. However, plaintiff's admissions regarding her belief of the true reason for her discharge is strong evidence the real reason was not her age. In light of the small quantity of evidence plaintiff is able to offer in support of her allegation she was discriminated against based upon her age, and the minor legal effect given to this evidence by courts, weighed against the evidence produced by defendant that age was not a factor in plaintiff's discharge, as well as plaintiff's admissions her discharge was motivated by reasons other than age, with age asserted by Momenee only as a pretext, I conclude no reasonable juror would find age to be a determining factor behind plaintiff's discharge from defendant's employment. In conclusion, even if plaintiff's claim for relief was not barred by the misrepresentations and omissions on her employment application, there is no genuine issue of fact that age was not a determining factor in her discharge, and therefore, judgment would be granted to defendant on plaintiff's ADEA claim. Likewise, plaintiff's claim of age discrimination based on the Elliott-Larson Act shall be dismissed, with judgment entered in favor of defendant. C. Exhaustion of Remedies Defendant asserts that because plaintiff did not pursue defendant's fair employment practice, policy, or grievance procedure, defendant's liability should be precluded, or in the alternative, plaintiff should not receive liquidated damages. Defendant's novel argument is not supported by any controlling authority. Because I have otherwise determined defendant should be granted judgment, I consider it prudent to refrain from deciding this issue. I consider this restraint especially important in light of defendant's propensity to furnish numerous unpublished decisions in support of its motion. However, I do note Congress, in passing the ADEA, provided that the filing of a charge with the EEOC is a jurisdictional prerequisite to filing a civil action under the ADEA. 29 U.S.C. § 626(d); Vinson v. Ford Motor Co., 806 F.2d 686, 688 (6th Cir.1986); cert. denied, 482 U.S. 906 (1987). Congress did not require an employee to pursue the internal remedies instituted by an employer first. Furthermore, in an analogous situation, the argument has been rejected that an employee first exhaust remedies set forth in a collective bargaining agreement or under the Railway Labor Act prior to instituting suit for age discrimination. Johnson v. American Airlines, Inc., 487 F.Supp. 1343 (N.D.Tex.1980). D. Employment Contract Implied In Fact *13 Plaintiff claims she had an employment contract with defendant such that she could be terminated only for just cause. Plaintiff does not allege this relationship arises from any express agreement between her and defendant. There is no issue of fact that no written contract of employment ever existed between the parties, and plaintiff has made no allegation that promises of permanent employment were ever made to her. (Plaintiff deposition at 317). Instead, plaintiff claims defendant's “standard work rules”, as well as the fact she had typed up performance improvement plans for sales representatives on separate occasions, is sufficient to establish she had a legitimate expectation of an employment relation with defendant such that her employment could be terminated only for just cause. Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.137 Page 10 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 In plaintiff's Brief in Opposition to Defendant's Motion for Summary Judgment, she relies on the Michigan Supreme Court's decision in Toussaint v. Blue Cross & Blue Shield of Mich., 408 Mich. 579, 292 N.W.2d 880 (1980). However, as defendant points out, the Michigan Supreme Court later altered the analysis for determining when an employee does not have an at-will employment relationship in Rowe v. Montgomery Ward & Co., 437 Mich. 627, 473 N.W.2d 268 (1991). In Rowe, the Michigan Supreme Court pointed out that “contracts for permanent employment are for an indefinite period of time and are presumptively construed to provide employment at will.” Id. at 636, 473 N.W.2d at 271; see also Prysak v. R.L. Polk Co., 193 Mich.App. 1, 6, 483 N.W.2d 629, 632 (1992). An at-will employment relationship is one where the employer may discharge an employee for any reason. Biggs v. Hilton Hotel Corp., 194 Mich.App. 239, 242, 486 N.W.2d 61, 63 (1992). The presumption of an at-will employment relationship can be rebutted by the following: 1) proof of an express contract for a definite term; 2) a provision forbidding the employee's discharge in the absence of just cause; or 3) proofs which permit a conclusion that there was a promise implied in fact of employment security. Rowe v. Montgomery Ward & Co., 437 Mich. at 636, 473 N.W.2d at 271. In this case, there is neither proof of an express contract between the parties, nor is there a provision in any agreement between them forbidding plaintiff's discharge in the absence of just cause. Plaintiff thus has a significant burden to overcome the presumption she was not an at-will employee, because “an employee who seeks to establish from conduct a promise implied in fact must meet a higher standard than an employee who relies on express language.” Id. at 644, 473 N.W.2d at 275. In Rowe, the Michigan Supreme Court left no doubt that determining whether an employee had an employment relationship such that she could be discharged only for just cause would be made on the basis of contract principles. Hence, subjective expectations on the part of the employee are insufficient to elevate the employment relationship beyond an at-will relationship. The Court must determine whether there was a meeting of the minds between both parties that plaintiff could be discharged only for just cause. Id. at 636, 639, 642, 646, 655, 473 N.W.2d at 271, 273-75, 279. There are no disputed facts surrounding plaintiff's employment relationship with defendant. The only task which would be left for the jury would be to look to the facts and circumstances to ascertain the intent of the parties. Id. at 639, 473 N.W.2d at 273. In doing so, the Court is required to use an objective, not a subjective, test. Id. *14 Plaintiff asserts the “standard work rules” promulgated by defendant implies a just cause employment relationship. I have reviewed the “standard work rules” and the applicable law, and conclude they do not support plaintiff's argument. In Rowe as well as numerous subsequent cases, courts have held the presence of work rules and disciplinary procedures do not give rise to a promise implied in fact of a just cause contract. In Rowe, the “rules of personal conduct” did not create a just cause contract because they did not contain “just cause” language, and nothing in the rules suggested the enumerated conduct was the only basis upon which an employee could be discharged. Id. at 644-45, 473 N.W.2d at 275. The Sixth Circuit came to the same conclusion in Baggs v. Eagle-Picher Indus., 957 F.2d 268, 272 (6th Cir.), petition for cert. filed, 113 S.Ct. 466, 1992 W.L. 266323 (1992) (progressive discipline procedures in handbook did not provide that it would be used in all cases, but depended on how serious the initial offense was, was not exhaustive, and contained no “just cause” provisions). Defendant's “standard work rules” identifies 22 prohibited actions. The rules specifically state this listing was not exhaustive. Furthermore, defendant provides that infractions of the rules will lead to some form of disciplinary action, but whether discharge would ensue was discretionary, based upon the frequency or seriousness of the offense. The fact discharge was discretionary, coupled with the non-exhaustive offenses which would lead to punishment, requires the conclusion the “standard work rules” could not give plaintiff a legitimate expectation of a just cause contract. See Rowe v. Montgomery Ward & Co., 437 Mich. at 644-45, 473 N.W.2d at 275; Baggs v. Eagle-Picher Indus., 957 F.2d at 272. The Michigan Court of Appeals recently rejected the argument that the presence of disciplinary rules automatically transforms the employment relationship from at-will to just cause. The fact that defendant had established a disciplinary system for its employees and, apparently, obligated plaintiff to abide by that disciplinary system in dealing with his subordinates does not Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.138 Page 11 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 establish unequivocally plaintiff's position that he was a just- cause employee rather than an at- will employee. Certainly, it is not unreasonable to expect that an employer, particularly one such as defendant that employs a large number of individuals, would want a systematic method of dealing with its employees and would provide a consistent set of guidelines under which its managers would deal with subordinates. This does not mean that by doing so an employer establishes just-cause employment rather than at-will employment. Biggs v. Hilton Hotel Corp., 194 Mich.App. at 241-42, 486 N.W.2d at 63. Finally, plaintiff argues the importance the “standard work rules” do not contain at-will language. Plaintiff's argument ignores the fact she is presumed to be an at- will employee, and it is her burden to overcome this presumption by objective evidence the parties considered their employment relationship differently. Moreover, in Rowe and Baggs, the Michigan Supreme Court and the Sixth Circuit both relied on the fact the discipline policies contained no language suggesting a just-cause relationship, and did not require the presence of at-will language. *15 Even if the “standard work rules” would have been phrased in language which would have created a legitimate expectation an employee would be discharged only for just cause, plaintiff could not rely on the work rules. Plaintiff testified in her deposition she was not aware of these work rules while she was employed, and even at the time of her deposition she was not aware of what the rules provided. (Plaintiff deposition at 22-23). As a matter of law, therefore, plaintiff could not base any expectation, either objective or subjective, on the standard work rules. Prysak v. R.L. Polk Co., 193 Mich.App. at 7, 483 N.W.2d at 632. After all, how could plaintiff place an expectation on something she was totally oblivious to? All that plaintiff has left to evidence a meeting of the minds between her and defendant that she would be discharged only for just cause is her awareness that on four occasions employees had been placed on performance improvement plans. However, plaintiff was given no written documents which would have advised her the company was required to put her on a performance improvement plan. No one at defendant ever informed plaintiff that an employee must be placed on a plan prior to discharge. Plaintiff was never informed she could be discharged only for just cause. There were no extensive pre-employment negotiations regarding employment security. Plaintiff's job was not unique, such as in Toussaint. Rowe v. Montgomery Ward & Co., 437 Mich. at 643, 473 N.W.2d at 274. Looking at the facts and circumstances surrounding plaintiff's employment relationship with defendant, using an objective test, I conclude there is no genuine issue of material fact, and that there was no promise of job security implied in fact. Id. at 639, 473 N.W.2d at 273. Under such circumstances, summary judgment is appropriate. Id. at 636, 473 N.W.2d at 271; Baggs v. Eagle-Picher Indus., 957 F.2d at 272; Biggs v. Hilton Hotel Corp., 194 Mich.App. at 243, 486 N.W.2d at 63; Prysak v. R.L. Polk Co., 193 Mich.App. at 8, 483 N.W.2d at 633. E. Mitigation of Damages Defendant argues plaintiff is not entitled to an award of back pay after July 21, 1991. This is the date plaintiff's employment with General Rehabilitation Services ceased. In so arguing, defendant assumes plaintiff's employment with General Rehabilitation Services was comparable to her employment with defendant. The facts show plaintiff was hired by General Rehabilitation as a receptionist/ secretary, and was paid $7.50 per hour. Plaintiff defined her benefits as health and retirement plans, which she described as excellent. However, defendant has provided no factual basis upon which this Court can compare plaintiff's non-wage benefits at General Rehabilitation Services with those received at Standard Register. Plaintiff argues that at Rehabilitation Services, she would have earned $14,560 annually, while she would have earned $19,396 if she would have remained employed with the defendant. *16 When a person has been discharged from a job for a discriminatory purpose, she must exercise reasonable diligence in mitigating her damages, and reduce the amount of back pay which she will be entitled to. Rasimas v. Michigan Dep't. of Mental Health, 714 F.2d 614, 623 (6th Cir.1983), cert. denied, 466 U.S. 950 (1984). Failure to mitigate is an affirmative defense, and defendant has the burden of proving the amount of the interim earnings or that plaintiff failed to use Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.139 Page 12 of 13 Greene v. Standard Register Co., Not Reported in F.Supp. (1992) 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 12 due diligence in mitigating her damages. Wooldridge v. Marlene Indus. Corp., 875 F.2d 540, 548 (6th Cir.1989). To do so, defendant must establish that: 1) there were substantially equivalent positions available; and 2) plaintiff failed to exercise reasonable care and diligence in seeking these positions. Id. A substantially equivalent position is one that gives a discharged employee “virtually identical promotion opportunities, compensation, job responsibilities, working conditions and status.” Jenkins v. Southeastern Michigan Chapter, American Red Cross, 141 Mich.App. 785, 797, 369 N.W.2d 223, 229 (1985). There is a genuine issue whether plaintiff's quitting her position at General Rehabilitation Service precludes an award of back pay after July 21, 1991. If defendant had met its burden by establishing plaintiff's position was comparable to her position at defendant, my decision would be different. An employee who has been discriminated against and subsequently voluntarily quits comparable work has failed to exercise reasonable diligence in mitigating her damages. Brady v. Thurston Motor Lines, Inc., 753 F.2d 1269, 1277 (4th Cir.1985). However, this does not apply when the discharged employee accepted non-comparable work. United States v. City of Chicago, 853 F.2d 572, 578-79 (7th Cir.1988); Sellers v. Delgado Comm. College, 839 F.2d 1132, 1136- 37 (5th Cir.1988), aff'd, 902 F.2d 1189; cert. denied, 498 U.S. 987, 111 S.Ct. 525 (1990); reh'g denied, 498 U.S. 1075, 111 S.Ct. 804 (1991). This principle rests upon the common sense realization that otherwise, a claimant who is not obligated to accept non-comparable work in the first place, would be required to remain in a non-comparable job once it was accepted. Sellers v. Delgado Comm. College, 839 F.2d at 1137. Defendant has failed to provide proof the promotion opportunities, responsibilities, and working conditions of plaintiff's job at General Rehabilitation Services, vis-a- vis her prior position as district office supervisor, were substantially equivalent. There is approximately a $5,000 wage differential between these positions, with plaintiff earning less at General Rehabilitation Services. There is no proof of the comparability of plaintiff's non-wage benefits between these two positions. It is possible these jobs are substantially equivalent. If this case went to trial, defendant would have had the opportunity to prove the positions were substantially equivalent. However, it has not carried its burden of proof in its present motion. Fauser v. Memphis Hous. Auth., 780 F.Supp. 1168 (W.D.Tenn.1991). IV. CONCLUSION *17 There is no genuine issue of material fact that defendant would not have hired plaintiff in the first instance had it been aware of the true nature of plaintiff's prior work history. Furthermore, there is no genuine issue of material fact that defendant would have terminated plaintiff's employment once it became aware of the omissions and misrepresentations regarding her past work history on plaintiff's employment application. Accordingly, plaintiff is entitled to no relief, even if she could prove she was fired for a discriminatory purpose. Furthermore, there is no genuine issue of material fact that plaintiff's termination was not pretextual, and that age was not a determining factor in her discharge from defendant's employment. Finally, there is no genuine issue of material fact that plaintiff was an at-will employee whose employment with defendant could be terminated for any reason. For all these reasons, Defendant's Motion for Summary Judgment shall be granted, judgment shall be entered in favor of defendant, and plaintiff's case shall be dismissed. All Citations Not Reported in F.Supp., 1992 WL 677502, 60 Fair Empl.Prac.Cas. (BNA) 1151, 128 Lab.Cas. P 57,722 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-6 filed 03/06/17 PageID.140 Page 13 of 13 Exhibit 6 Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.141 Page 1 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2009 WL 3270276 Only the Westlaw citation is currently available. United States District Court, W.D. Michigan, Southern Division. INTERNATIONAL-MATEX TANK TERMINALS- ILLINOIS, a Delaware general partnership, Plaintiff, v. CHEMICAL BANK, a Michigan state-chartered bank, Defendant. No. 1:08-cv-1200. | Oct. 5, 2009. Attorneys and Law Firms Brian Patrick O'Meara, David Lawrence Rieser, David L. Hartsell, Mcguirewoods LLP, Chicago, IL, for Plaintiff. Daniel J. Langdon, Sean P. Fitzgerald, Kreis Enderle Hudgins & Borsos, PC, Grand Rapids, MI, for Defendant. Opinion and Order (“Matex 4”) PAUL L. MALONEY, Chief Judge. Granting Plaintiff International Matex's Motion for Summary Judgment; Denying Defendant Chemical Bank's Motion for Summary Judgment; Directing the Parties to Jointly Quantify the Defendant's Liability *1 Plaintiff International-Matex Tank Terminals- Illinois (“Matex”) operates petroleum and chemical storage facilities in Lemont and Joliet, Illinois. See Matex's MSJ, Exhibit (“Ex”) A-Affidavit of Matex Sales Manager Mark Engdall dated May 4, 2009 (“Engdall Aff 2”) ¶¶ 3-4. In December 2006, Matex executed a written contract wherein it leased a fuel storage tank to non-party General Sales and Service, Inc., d/b/a Torco Racing Fuels (“Torco” and “the Torco contract”) for three years, in return for monthly payments from Torco. The contract required Torco to obtain a letter of credit (“LOC”) to serve as security for those monthly rental payments. On September 13, 2007, Torco obtained an LOC from defendant Chemical Bank (“Chem”) in favor of Matex, with a limit of $200,000 in aggregate “drawing” rights for Matex. Torco missed numerous monthly rental payments, and by June 2008 it owed Matex more than $28,000. See Engdall Aff ¶ 11. Matex sent a Default Letter to Torco on June 19, 2008 demanding payment within fifteen days. When Torco failed to pay, Matex sent a letter on July 18, 2008 stating that it was accelerating liability for the monthly payments that would have come due during the rest of the 3-year contract, for a total of about $274,000. See Engdall Aff ¶¶ 11-14 and its Exs. 2 and 3. The lack of payments from Torco caused Matex to present a “draw” on the LOC, in the maximum amount of $200,000, on July 28, 2008. See Engdall Aff ¶ 15 & its Ex. 4 (the Draw). Chem refused to honor, and continues to refuse to honor, the Draw. Matex filed a motion for summary judgment in March 2009, and Chem cross-moved for summary judgment in April 2009. In May 2009, Matex filed a joint opposition/ reply brief. Chem filed a reply brief in support of its motion, but not a brief directly in opposition to Matex's motion. For the reasons that follow, the court will grant summary judgment to plaintiff Matex. Matex contends that its presentation of the Draw was proper, triggering Chem's contractual obligation under the LOC to pay $200,000 to Matex. Matex also contends that even if its presentation of the Draw were technically or procedurally improper, Chem has waived its right to dishonor the Draw on that basis. Specifically, Matex alleges that Chem failed to notify it, within the time required by the law, of any deficiency in its presentation of the Draw. Accordingly, Matex asserts Michigan common-law claims for Breach of Contract (count one) and Wrongful Dishonor of an Instrument (count two). The LOC provides, in pertinent part, [Chem] hereby establish[es][its] irrevocable standby letter of credit No. 2007-19 in [Matex's] favor effective September 13, 2007 for the account to [Torco] up to an aggregate amount of U.S. $200,000.00 (Two Hundred Thousand and 00/100 U.S. Dollars) available at sight upon [Matex's] demand for payment with [Chem] against [sic] presentation of the following documents: Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.142 Page 2 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 *2 1. A) i. Copy(ies) of Original, or telecopies of invoice(s) issued by Matex-Lemont requesting payment from [Torco] and ii. Statement purportedly signed by an authorized representative of Matex-Lemont stating that the drawing amount represents funds due to Matex- Lemont under the accompanying invoice(s) which have not been paid by [Torco] under the leaded racing fuel agreement No. TOR-L1 and that the said invoice(s) remain(s) unpaid at the time of drawing. Engdall Aff, Ex 1(LOC). Matex contends that it complied with these LOC terms by providing Chem with copies of its invoices to Torco and a signed statement by a Matex representative that the funds requested represented the amount which Torco owed but had not paid, and it notes that “Chemical Bank has never claimed that the documents provided by Matex in support of the Draw were in any way defective.” Matex MSJ at 6 (citing Engdall Aff ¶ 18). Matex notes Chem Bank Vice-President Tim Walling's admission that “Chemical Bank did not notify IMTT of any discrepancy in the presentation of the Draw[.]” Matex Opp/Reply at 2 (quoting Walling Aff (Chem MSJ Ex 1) ¶ 13). On these bases, Matex seeks summary judgment on count one, breach of contract. Chem Bank responds that Matex did not follow the procedures which the LOC specified as prerequisites to a valid Draw. Chem Bank points out that Matex repeatedly presented the Draw at a location other than that required by the LOC, and never presented the Draw at the location expressly required by the LOC. See Chem's MSJ at 5, citing Ex B(LOC) (“We hereby engage with you that documents drawn in compliance with the terms and conditions of this letter of credit will be duly honored by us upon presentation at Chemical Bank, 823 Riverview Drive, Benton Harbor, MI 49022 before the close of business on September 13, 2008.”) (emphasis added by Chem). Namely, on July 7, 2008, Matex sent its first attempted Draw-by facsimile, by e-mail, and by Federal Express delivery-all to Tim Walling in Chem's Marshall, Michigan office. See Chem's MSJ at 6, citing Ex D (First Draw Request, dated July 7, 2008). At about 4:17 p.m. on July 28, 2008, Matex sent its second attempted Draw, again to Tim Walling in Chem's Marshall, Michigan office. See Chem's MSJ at 6, citing Ex G (Second Draw Request, dated July 28, 2008). About half an hour later, at 4:54 p.m., Matex sent a “revised draw” to Chem's counsel, see Chem's MSJ at 6 (no citation to the record), who apparently also was not located in Chem's Benton Harbor, Michigan office. About ten minutes later, at 5:03 p.m., Matex sent a “correct demand notice” to Chem's counsel, who apparently still was not located in Chem's Benton Harbor, Michigan office, and this notice was addressed to Walling in Chem's Marshall, Michigan office. See Chem's MSJ at 6 (no citation to the record). Finally, on September 12, 2008, Matex sent its last Draw request only to Walling in Chem's Marshall, Michigan office. See Chem's MSJ at 6-7, citing Ex H (Third Draw Request, dated September 12, 2008). *3 Matex does not dispute that it never delivered or sent any of its attempted Draw requests to the address specified in the LOC. Nor does Matex deny the applicability and plain meaning of MICH. COMP. LAWS § 440.5108(1), which provides, Except as otherwise provided in section 5109 1 , an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (5) 2 , appears on its face to comply with the terms and conditions of the letter of credit. Except as otherwise provided in section 5113 [MICH. COMP. LAWS § 440.5113] and unless otherwise agreed with the applicant, an issuer shall dishonor a presentation that does not appear to comply. Emphasis added. This court finds that Matex failed to comply with the LOC's location-of-presentation term. Matex alleges that the reason why it did not comply with the LOC's location-of-presentation term is that Chem “affirmatively requested that IMTT [Matex] send draws to Chemical Bank's Marshall, Michigan location.” Matex's Opp/Reply at 3-4 (citing Ex A, Engdall Aff ¶ 6). 3 Specifically, Matex alleges that a Chem employee named Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.143 Page 3 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 “Ms. Velvet” directed Matex employee Mark Engdall to send draw requests to Tim Walling in the Marshall office. Matex explains that [t]his was not unusual as Chemical Bank had previously honored draws on another letter of credit at the Marshall, Michigan location. * * * As a result of this specific instruction and past practice, Chemical Bank cannot now claim that [Matex] sent the Draw to the wrong location. Chemical Bank's “bait and switch” routine mocks the fundamental principle of good faith and fair dealing that is implied in every contract. Matex Opp/Reply at 4, citing Ex A (Engdall Aff) ¶¶ 6-7 (other citations omitted). See also Matex Opp/Reply at 5-6. Chem responds that the employee in question, Velvet Smith, was never an assistant to Mr. Walling, never worked in Chem's commercial department, never spoke with Matex's Mark Engdall, and lacked actual or apparent authority to direct LOC beneficiaries to present draws to any particular office. See Chem's Reply at 2, citing Ex A (Affidavit of Timothy Walling dated May 8, 2009); Affidavit of Velvet Smith dated May 27, 2009 (“Smith Aff”) ¶¶ 2-7. Chem also denies that its standard practice with other LOCs was to accept draws at the Marshall office. See Chem Reply at 2. Matex has submitted a record of a July 2007 wire transfer from Chem Bank as proof that Chem honored a draw on a different (2006) Torco-related LOC even though it was presented to an office other than that purportedly required by that LOC's terms. Chem counters with Walling's testimony that the wire transfer in question, for about $3,400, “was not based upon the draw request, but [was] drawn directly from the line of credit of ... Torco's parent company.” Chem Reply at 3, citing Ex A (Affidavit of Timothy Walling dated May 8, 2009) ¶ 9. Ultimately, Matex asserts that by invoking its right to dishonor draws which were admittedly not sent to the address required by the LOC, Chem is somehow violating the duty of “good faith and fair dealing that is implied in every contract.” Id. at 4 (citation omitted). This argument lacks merit. *4 It is true that “Michigan common law recognizes an implied ‘covenant of good faith and fair dealing’ in every contract ....“ Little Caesar Enters., Inc. v. Rooyakker, 2009 WL 1940563, *6 (Mich.App. July 7, 2009) (p.c.) (P.J. Zahra, Whitbeck, M.J.Kelly) (citing Hammond v. United of Oakland, Inc., 193 Mich.App. 146, 483 N.W.2d 652, 655 (Mich.App.1992)). But Matex cannot use the duty of good faith and fair dealing as an end run around the unambiguous language of the contract. See Kuzin v. A & J Precision Tool Co., Inc., 2001 WL 694089, *6 (Mich.App. Mar.30, 2001) (p.c.) (P.J. Whitbeck, Murphy, Cooper) (“ ‘Under Michigan law, this implied covenant does not override the express terms of the parties' contract, and cannot form the basis for a claim independent of that contract.’ ”) (quoting Clark Bros. Sales Co. v. Dana Corp., 77 F.Supp.2d 837, 852 (E.D.Mich.1999) (Rosen, J.)) (citing, inter alia, Gen. Aviation, Inc. v. Cessna Aircraft Co., 915 F.2d 1038, 1041 (6th Cir.1990) and Cook v. Little Caesar Enters., Inc., 972 F.Supp.2d 400, 409 (E.D.Mich.1997) (Gadola, J.)). A fuller quotation of the Michigan courts' statement of the principle makes this clear: “Michigan common law recognizes an implied ‘covenant of good faith and fair dealing’ in every contract ‘that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract.’ “ Little Caesar, 2009 WL 1940563 at *6, and In re Estate of Denonville, 2009 WL 2635150, *2 (Mich.App. Aug.27, 2009) (p.c.) (P.J. Wilder, Jansen, Owens) (both quoting Hammond, 483 N.W.2d at 655) (emphasis added). A putative right to present to present draw requests somewhere other than Benton Harbor could not be part of “the fruits of the contract”, as such presentation flatly contradicted the terms of the LOC. If Matex wanted a legally enforceable right to present draw requests at the Marshall office, it could and should have negotiated the inclusion of such a term in the LOC. Cf., e.g., First Apostolic Lutheran Church v. Bekkala, 2005 WL 2086137, *2 (Mich.App. Aug.30, 2005) (p.c.) (P.J. Saad, Hoekstra, Markey) (rejecting Church's argument that court should read into the contract the proviso that a certain option be deemed to expire within a “reasonable time”, stating, “if the Church here desired to limit the applicability of the option to a particular time period, it should have negotiated such a limitation into the deed.”) (citing Toledo v. AAR Co., 55 Mich. 456, 21 N.W. 888, 890-91 (Mich.1885) (“[t]he defendant's agreement was to pay on or before six months after the first cars ran over the road from Ann Arbor to Toledo, and he could not be compelled to pay before that event should happen. If he had wished to limit the time beyond which his liability would not extend, he should have incorporated it into the contract.”) (citing Stange v. Wilson, 17 Mich. 342, 1868 Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.144 Page 4 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 WL 3303 (Mich. Oct. 14, 1868))), app. denied, 711 N.W.2d 314 (Mich.2006). *5 Moreover, even if this court agreed that Chem had engaged in a “bait and switch” by orally asking Matex to present draws at the Marshall office, Michigan law would not authorize this court to “punish” or chastise Chem by excusing Matex's noncompliance with the LOC's written location-of-presentation requirement. Michigan courts do not and cannot refuse to enforce contractual provisions merely because the court feels that the result of enforcement is “too harsh” or “unfair.” See, e.g., Chrysler Corp. v. DiClemente Siegel Engineering, Inc., 1996 WL 33347850, *3 (Mich.App.1996) (p.c.) (P.J. O'Connell, Smolenski, Cir. J. T.G. Power): Defendant argues that, regardless of whether the termination language was part of the contract, the general black letter rule that an implied duty of good faith and fair dealing cannot override express contractual terms should not be applied to the instant case due to the disparity in bargaining power between plaintiff and defendant. * * * [But] we do not find [Fourth Circuit decision cited by defendant] to be persuasive because Michigan law provides that a lack of good faith cannot override an express provision in a contract. Eastway & Blevins Agency v. Citizens Ins. Co. of America, 206 Mich.App. 299, 520 N.W.2d 640 (Mich.App.1994); .... No evidence suggests that plaintiff and defendant entered into the blanket purchase order agreement other than voluntarily, with full knowledge of the applicable terms. Therefore, the termination language of the contract cannot be overridden by any lack of good faith. Id. at *3 (emphasis added). Finally, the court notes that Matex never explicitly argues that the LOC was legally modified by Chem's alleged request that it present draw requests at the Marshall office. To the extent that Matex intended to make such an argument, the court rejects it as inadequately developed and inadequately supported by citation to Michigan precedent, and as meritless. Section 11 of the LOC clearly states, “This Agreement may not be changed or modified without the written consent of the party sought to be bound by such change or modification.” Chem's MSJ, Ex A at unnumbered page 13. The Michigan courts routinely enforce such contractual provisions, and Matex identifies no precedent suggesting that they would not enforce it here. As this court recently stated in a case applying Michigan common law, Vandenburg has not explicitly contended that RMC's oral request for the return of certain materials somehow effected a modification of his contractual obligation to return all materials. Indeed, Vandenburg would be hard-pressed to make such an argument in the face of section 14-F, Enforcement-Entire Agreement, which contains an integration clause stating, This agreement contains all the understandings and agreements between the parties concerning Employee's employment. Employee acknowledges that no person who is either an agent or employee of RMC may orally or by conduct modify, delete, vary, or contradict the terms and conditions set forth herein. *6 See Bero Motors, Inc. v. GMC, 480 Mich. 1053, 743 N.W.2d 886, 887 (Mich.2008) (J. Corrigan, dissenting from denial of leave to appeal, joined by J. Markman) (“in Quality Products & Concepts Co. v. Nagel Precision, Inc ..., 469 Mich. 362, 666 N.W.2d 251 (2003), this Court held that a party who seeks to prove that a written agreement prohibiting oral modifications was [nonetheless] orally modified must prove by clear and convincing evidence ‘that the parties mutually intended to modify the particular original contract, including its restrictive amendment clauses such as written modification ... clauses.’ ”). Rochester Midland Corp. v. Enerco Corp., 2009 WL 1561817, *6 (W.D.Mich. June 1, 2009) (Maloney, C.J.). Accord Spero Elec. Corp. v. IBEW, 439 F.3d 324329 (6th Cir.2006) (under federal common law, “ ‘we need not decide whether oral modification in general is impermissible because all CBAs here contained an express zipper clause prohibiting modification except by written agreement executed by both parties. Such zipper clauses are legally effective. Because neither an oral agreement, Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.145 Page 5 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 nor an unsigned letter that by its own terms only covers the initial CBA, constitutes a valid modification of the final CBA at issue here, [the final CBA]'s unambiguous language controls.’ ”) (quoting Pleasantview Nursing Home, Inc. v. NLRB, 351 F.3d 747, 750 754 (6th Cir.2003) (Boggs, C.J.) (internal citation and footnotes omitted)). The court determines that Matex's non-compliance with the LOC's location-of-presentation provision triggered Chem's presumptive right under MICH. COMP. LAWS § 440.5108(1) to dishonor all the non-complying Draw requests. As will be seen below, however, Chem subsequently waived that right by failing to comply with both MICH. COMP. LAWS § 440.5108(2), which required it to give certain notice within seven business days of a non-complying draw request, and UCP Article 16(d), which required it to give certain notice within “five banking days” of a non- complying draw request. As to Count II, Wrongful Dishonor, Matex contends that under Michigan law, Chem was required to take certain actions within seven business days after Matex presented the Draw: An issuer has a reasonable time after presentation, but not beyond the end of the seventh business day of the issuer after the day of its receipt of documents to do 1 or more of the following: (a) To honor. (b) If the letter of credit provides for honor to be completed more than 7 business days after presentation, to accept a draft or incur a deferred obligation. (c) To give notice to the presenter of discrepancies in the presentation. MICH. COMP. LAWS § 440.5108(2). Matex states that the LOC did not provide for Chem to honor the Draw more than 7 business days after it was presented, see Matex MSJ at 1 n. 1, and Chem does not contradict this statement. Accordingly, the court determines that MICH. COMP. LAWS § 440.5108(2)(b) does not apply. *7 Rather, Matex contends that no later than August 6, 2008-seven business days after Chem received Matex's Draw on July 28, 2008-Chem was statutorily obligated to either honor the Draw (the option permitted by MICH. COMP. LAWS § 440.5108(2)(a)) or notify Matex of any discrepancy in its presentation (the option permitted by MICH. COMP. LAWS § 440.5108(2)(c)). In further support of count II, Wrongful Dishonor, Matex invokes the International Chamber of Commerce's Uniform Custom and Practice for Documentary Credits (“UCP”) 4 Article 14(b), which provides that “the issuing bank shall ... have a maximum of five banking days following the day of presentation to determine if a presentation is complying.” Matex contends that once Chem decided not to honor the Draw due to noncompliant presentation, UCP Article 16(c) required it to provide Matex with a single notice-not more than one notice-which stated i. that the bank is refusing to honor or negotiate; and ii. each discrepancy in respect of which the bank refuses to honor or negotiate; and iii. a) that the bank is holding the documents pending further instructions from the presenter; or b) that the issuing bank is holding the documents until it receives a waiver from the applicant and agrees to accept it, or receives further instructions from the presenter prior to agreeing to accept a waiver; c) that the bank is returning the documents; d) that the bank is acting in accordance with instructions previously received from the presenter. In turn, UCP Article 16(d) requires the bank to provide such notice “no later than the close of the fifth banking day following the presentation.” Ultimately, Matex contends that Chem's failure to comply with the notice provisions of state statute and the UCP preclude it from dishonoring the Draw for any reason which it did not specify by proper notice. Matex relies on MICH. COMP. LAWS § 440.5108(3), which provides, Except as otherwise provided in subsection (4), 5 an issuer is precluded from asserting as a basis for dishonor any discrepancy if Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.146 Page 6 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 timely notice is not given, or any discrepancy not stated in the notice if timely notice is given. Emphasis added. The commentary to this statutory section states that a bank's “failure to act within the time permitted ... constitutes dishonor”, and it warns that [b]ecause of the preclusion in subsection [3] [MICH. COMP. LAWS § 440.5108(3) ] and the liability an issuer may incur ... for wrongful dishonor, the effect of such silent dishonor may ultimately be the same as though the issuer had honored, i.e., it may owe damages in the amount drawn but unpaid under the letter of credit. MICH. COMP. LAWS § 440.5108, comment 2. As for the UCP, Matex relies on Article 16(f), which provides, If an issuing bank fails to act in accordance with the provisions of this article, it shall be precluded from claiming that the documents do not constitute a complying presentation. *8 Chem's attempt to avoid the consequence of its non- compliance with these Michigan statute and UCP notice requirements is unavailing. Chem argues that because Matex did not comply with the LOC's location-of- presentation requirement, then Chem's duty to give notice of its reason for refusing to honor the draws never arose. See Chem's MSJ at 9-13 and Chem's Reply at 1-2. This argument is untenable because Chem identifies no Michigan precedent supporting it, and because it would lead to an extreme and illogical result. Namely, if the issuer of an LOC were allowed to dishonor a draw without complying with its notice-of-discrepancy obligations-on the ground that there was a discrepancy in the first place (in this case, Matex's failure to present the draws to the address specified in the LOC)-the notice-of-discrepancy requirements in UCP Article 16 and MICH. COMP. LAWS § 440.5108 would be rendered nugatory. Chem provides no reason to believe such an extreme result was intended by the Michigan Legislature, by the drafters of the UCP, or by these parties when they entered into the LOC. And it would contravene the venerable principle that courts must not construe statutory or contractual provisions so as to deprive such a provision of force and effect. See Mantei v. Michigan Pub. Sch. Employees Ret. Sys., 256 Mich.App. 64, 663 N.W.2d 486, 491-92 (Mich.App.2003) (Richard Allen Griffin, J.) (“When parsing a statute, this Court presumes that every word is used for a purpose. It is important to ensure that words in a statute are not ignored, treated as surplusage, or rendered nugatory.”) (citing, respectively, Pohutski v. Allen Park, 465 N.W.2d 675, 683, 641 N.W.2d 219, 226 (Mich.2002) (Maura Corrigan, C.J.) and Robertson v. Daimler Chrysler Corp., 465 Mich. 732, 748, 641 N.W.2d 567, 576 (Mich.2002) (Stephen Markman, J.)). Accord Reg. Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 716 (6th Cir.2007) (holding that the construction of a rule urged by the plaintiff “would render [certain] words surplusage, a result we are to avoid whenever possible”) (citing, inter alia, Ratzlaf v. US, 510 U.S. 135, 140, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)); Dematic Corp. v. UAW, 635 F.Supp.2d 662, ----, 2009 WL 2143648, *10 (W.D.Mich. July 16, 2009) (Maloney, C.J.) (“Like a statute, a CBA must be construed so as to give force and effect to all its provisions, ‘so as to render none nugatory.’ ”) (quoting, inter alia, Tackett v. M & G Polymers USA, LLC, 561 F.3d 478, 489 (6th Cir.2009)). Finally, the court agrees with Matex that Chem's remaining defenses lack merit. First, Matex correctly contends that the issue of whether it terminated the Matex-Torco contract is not material, because the status of that contract cannot affect Chem's obligation to honor the Draw. See MSJ at 9. Matex rightly relies on MICH. COMP. LAWS § 440.5108(4), which provides that “[r]ights and obligations of an issuer to a beneficiary” under an LOC “are independent of the existence, performance, or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it ....”, and on UCP Article 4(a), which provides that *9 A credit by its nature is a separate transaction from the sale or other contract on which it may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the letter of credit. Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.147 Page 7 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 See Matex's MSJ at 10-11. Chem also contends, by way of defense, that it was entitled to dishonor Matex's Draw because it did not comply with the LOC in a second respect: Matex did not include the original LOC with the Draw, as required by paragraph 7 of its LOC application per Chem's regular business practice. See Chem's MSJ at 5-6, citing its Ex A (LOC Application) and Ex B(LOC) and Ex C (Affidavit of Rhonda Mauchmar) ¶ 8 and Ex D (Matex's first Draw Request, dated July 7, 2008); see also Chem Reply at 4 (“[Matex] never presented LOC 2007-019 despite being directed to do so by Mr. Walling [a vice-president in Chem's Marshall office].”). Matex responds that Chemical Bank's argument that [Matex] was required to provide the original Letter of Credit provides no support in the actual terms of the Letter of Credit. Chemical Bank relies on the application submitted by Torco for the Letter of Credit .... The Torco application was not even signed by [Matex] and has no bearing on [Matex]'s right to payment under the Letter of Credit. Matex Opp/Reply at 4 (emphasis added); see also Matex Opp/Reply at 7-9 (citing, inter alia, Werner Lahara Int'l, Inc. v. Harris Trust & Savings Bank, 484 F.Supp. 65, 72 (W.D.Mich.1980) and UCP Article 4(a)). Moreover, the Michigan Legislature has broadly provided that [r]ights and obligations of an issuer to a beneficiary to a nominated person under a letter of credit are independent of the existence, performance, or nonperformance of a contract or arrangement out of which the letter of credit arises or which underlies it, including contracts or arrangements between the issuer and the applicant and between the applicant and the beneficiary. MICH. COMP. LAWS § 440.5103(4). 6 Matex properly states and applies this principle of law, and Chem does nothing to persuasively undermine it. See Bossier Bank & Trust Co. v. Union Planters Nat'l Bank of Memphis, 550 F.2d 1077, 1081 (6th Cir.1977) (“The letter of credit constitutes an independent contract between the issuer [Chem] and the beneficiary [Matex].”). Finally, Chem asserts that it was entitled to dishonor Matex's $200,000 Final Draw Request because Matex was attempting to have Chem pay an invoice which was not “due and owing”, namely Invoice No. LEO 807-701. See Chem's MSJ at 7. It is undisputed that Matex's alleged right to Torco's payment of the $200,000+ in rent depended on Matex's acceleration of the rents due for the remainder of the Torco contract's three-year term. Chem contends that once Matex terminated its contract with Torco, Matex was not legally entitled to accelerated payment of those future rents. Accordingly, Chem reasons, because Matex had no right to require Torco to pay accelerated future rents, the invoice it issued to Torco was not an “unpaid” invoice. See Chem Reply at 3(“Because Invoice LEO 807-701 was not due and owing at the time of the alleged presentment, Chemical Bank was not bound even under the terms of the Letter of Credit to pay an invoice that is not due.”)3. Cf. Osten Meat Co. v. Fist of America Bank- S.E. Michigan, N.A., 205 Mich.App. 686, 517 N.W.2d 742, 748 (Mich.App.1994) (P.J. Sawyer, J. Corrigan, 30th Cir. J. Thomas Leo Brown) (holding that bank was entitled to dishonor beneficiary's draft on LOC, because beneficiary had submitted an invoice marked “paid” and the LOC's terms allowed a draft to be made only for payment of unpaid invoices), leave to app. denied, No. 100700, 534 N.W.2d 525 (Mich. May 30, 1995) (table). *10 In response to Chem's terminated-contract and LOC-only-for-the-life-of-the-contract arguments, Matex again takes justifiable refuge in the principle that an LOC is separate and independent from any related contracts- such as the Torco-Matex contract which required Torco to obtain the LOC in Matex's favor. As Matex emphasizes, the “very purpose [of an LOC] is to assure payment without re[ference] to disputes regarding the underlying contract.” Matex Opp/Reply at 4. If Torco wishes to contest its obligation to pay the accelerated rents-or Matex's right to simultaneously terminate the Torco contract and demand such accelerated rents- or to challenge the rent-acceleration clause itself as unenforceable for unconscionability, it is Torco's right and opportunity to do so in separate litigation; it is not Chem's place to do so here. Chem's argument that Matex's invoice is not “due and owing” because it believes Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.148 Page 8 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 Torco has valid legal defenses to Matex's demand for payment of accelerated rent, cannot be resolved without “reference to” the underlying Matex-Torco contract. The principle that an LOC is independent from any underlying or related contracts is designed precisely to prevent LOC claimants and the courts from becoming embroiled in such ancillary disputes about contract formation, execution, enforceability, interpretation, etc. See In re Auto Specialties Mfg. Co., 153 B.R. 510, 519-20 (W.D.Mich.Bankr.1993) (Jo Ann Stevenson, Bankr.J.) (“The whole point of a credit transaction is to remove the vagaries of the underlying transaction from contention.”). Accordingly, even if Matex breached its contract with Torco or acted beyond its authority under that contract, that would be of no avail to Chem with regard to its duties and rights under the LOC. As our Court of Appeals recently declared, Under the so-called ‘independence principle,’ a bank's duty to pay on letters of credit is independent of whether or not the applicant ... and the beneficiary ... have performed on the underlying contract. “In other words, the bank ‘must pay on a proper demand from the beneficiary even though the beneficiary may have breached the underlying contract with the applicant.” Langley v. Prudential Mtg. Capital Co., 554 F.3d 647, 649 (6th Cir.2009) (panel denial of rehearing) (quoting 3 JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE § 26-2 at 138 (5th ed.2008)) (emphasis added). Note on Previous Denial of Motions for Leave to File Sur-Reply Briefs Matex moved for leave to file a sur-reply brief on the ground that Chem's reply brief “raises new issues that were never addressed in its previously-filed brief. Specifically, Chemical Bank, for the first time, accused Matex of ‘asking Chemical Bank to commit fraud.’ This is a serious accusation that is unsupported by the law or facts and Matex should be allowed to respond.” Matex's Mot. for Leave to File Sur-Reply at 2. Matex charged that [i]n raising this new issue, Chemical Bank is trying to find an excuse, no matter how far-fetched, for missing the notification deadlines for dishonor that are set forth in the Michigan Compiled Laws and the ... UCP.... Fraud is one basis for dishonor that is not subject to those deadlines. *11 As detailed in Matex's previously-filed briefs, Michigan law and the UCP require Chemical Bank to notify Matex of any discrepancies in the presentation of the July 28, 2008 Draw (the “Draw”) within certain timeframes. The law clearly dictates that Chemical Bank's failure to timely notify Matex of any discrepancies precludes Chemical Bank from later claiming discrepancies in the presentation of the Draw. Accordingly, all of Chemical Bank's previous arguments fail because it is uncontested that Chemical Bank did not notify Matex of any discrepancies by the legally imposed deadlines. * * * Matex's Brief in Support of Mot. for Leave to File Sur- Reply at 1 (paragraph break added). This court agreed that Chem should not be permitted to raise new arguments, issues or defenses for the first time in a reply brief. The court denied Matex leave to file a sur- reply, however, writing as follows: Chem could and should have raised the fraud argument in its brief supporting its own summary-judgment motion, or in a brief opposing Matex's summary- judgment motion [which Chem did not file]. The most logical course of action, however, is not to complicate and prolong this dispute, and consume more judicial resources, by allowing Matex to respond to an argument that is not properly before the court in the first place. The court sees no reason to depart from the well-settled rule that “this court will not consider arguments that are raised for the first time in a reply brief.” * * * accord Am. Traffic Solutions, Inc.... (D.Ariz. Mar. 20, 2009) (“The remedy for dealing with new evidence first appearing in a reply is that we will not consider issues or evidence raised for the first time in [a] reply.”).... * * * Accordingly, to the extent that Chem has asserted any new fraud argument, theory, or evidence in its reply brief, this court will disregard it. This protects Matex's reasonable expectations about motions practice at least as much as allowing a sur-reply. And, unlike allowing a sur-reply, this course of action safeguards the party which apparently has been diligent in its briefing Case 1:16-cv-01301-PLM-PJG ECF No. 9-7 filed 03/06/17 PageID.149 Page 9 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 (Matex), without expending judicial resources on an issue that its adversary (Chem) waived through inaction or oversight. * * * International-Matex Tank Terminals-Illinois v. Chemical Bank, 2009 WL 1651291, *2-3 (W.D.Mich. June 11, 2009) (Maloney, C.J.) (“Matex 2” ) 7 (other citations omitted) (nn. 2 and 3 omitted). Similar reasoning applied with respect to Chem's subsequent motion for leave to file a sur-reply brief. Rather than prolong and complicate this matter by adding another brief on an argument that is not properly before the court, the court determined that the better course was to disregard such arguments. Chem argued that it needs a sur-reply brief for two reasons. First, it wished to counter Matex's argument that because Chem never filed a separate brief in opposition to Matex's motion for summary judgment, it effectively conceded all of Matex's factual allegations. The court reasoned that Chem did not need a sur-reply for this purpose, stating as follows: *12 the court finds that [Chem']s decision not to file an opposition brief, while perhaps unwise, has not effected the blanket concession of Matex's factual allegations. As Chem notes, it filed affidavits with its own summary-judgment motion. The court will consider those affidavits as contesting the corresponding factual allegations made in Matex's complaint and opening summary-judgment brief. Second, Chem explains it raised the issue of fraud in direct defense to the Motion for Summary Judgment. LOC 207-19 specifically states that “that if General Sales and Service, Inc. DBA Torco Racing Fuels does not have a bond issued to serve as collateral for the aforementioned contract, TOR- L1[, then] General Sales and Service, Inc. DBA Torco Racing Fuels agrees to have a Letter of Credit available for the life of the said contract.” (emphasis added). Matex terminated TOR-L1 on July 7, 2008. As of July 7, 2008, [therefore,] LOC 2007-19 was no longer available to Matex. Chem's Motion for Leave to File a Sur-Reply Brief at 2 (emphasis in original); see also Chem's Proposed Sur-Reply Brief at 2-3 (“Although Matex argues that the status of TOR-L1 [the Matex-Torco contract] is immaterial to this dispute, it ignores the clear language in LOC 2007-19.[U]nder paragraph 3 of Special Instructions ... Torco ... ‘does not have a bond issued to serve as collateral for the aforementioned contract .... [Torco] agrees to have a letter of credit available for the life of said contract.”). A sur-reply brief is inappropriate for this purpose, because Chem could and should have fully developed and supported the terminated-contract defense in its opening summary-judgment brief or at least in its reply brief. The court will evaluate Chem's terminated-contract and LOC-only-for-life-of-the-contract defenses based on the arguments and authorities presented in Chem's opening summary-judgment brief and its reply brief supporting its motion (it did not file a brief denominated as a brief in opposition to Matex's motion ... ). International-Matex Tank Terminals-Illinois v. Chemical Bank, 2009 WL ----, * ---- (W.D.Mich. Aug. 4, 2009) (Maloney, C.J.) (“Matex 3”) (last ¶ break added) (some citations to record and briefs omitted). ORDER Plaintiff's motion for summary judgment [doc. # 37] is GRANTED. Defendant's corrected motion for summary judgment [doc. # 40] is DENIED. No later than Monday, November 23, 2009, the parties SHALL JOINTLY FILE a notice stating the total amount which the defendant owes to the plaintiff as a result of today's opinion and judgment, including, as applicable, any damages owing under MICH. COMP. LAWS § 440.5111(1), pre-judgment interest under state law, post-judgment interest under federal law, 8 and attorneys' fees and costs under MICH. COMP. LAWS § 440.5111(4) or other applicable authority. 9 Case 1:16-cv-01301-PLM-PJG E F No. 9-7 filed 03/06/17 PageID.150 Page 10 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 This is not a final order, because the amount of the defendant's liability has not yet been determined, and judgment has not yet been entered. 10 *13 IT IS SO ORDERED. All Citations Not Reported in F.Supp.2d, 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 Footnotes 1 MICH. COMP. LAWS § 440.5109 provides as follows: (1) If a presentation is made that appears on its face to strictly comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud by the beneficiary on the issuer or applicant: (a) The issuer shall honor the presentation, if honor is demanded by one or more of the following: (i) A nominated person who has given value in good faith and without notice of material fraud. (ii) A confirmer who has honored its confirmation in good faith. (iii) A holder in due course of a draft drawn under the letter of good credit which was taken by acceptance by the issuer or nominated person. (iv) An assignee of the issuer's or nominated person's deferred obligation that was taken for value and without notice of forgery or material fraud after the obligation was incurred by the issuer or nominated person. (b) The issuer, acting in good faith, may honor or dishonor the presentation in any other cause. (2) If an applicant claims that a required document is forged or materially fraudulent or that honor of the presentation would facilitate a material fraud by the beneficiary on the issuer or applicant, a court of competent jurisdiction may temporarily or permanently enjoin the issuer from honoring presentation or grant similar relief against the issuer or other persons only if the court finds all of the following: * * * Matex's opening brief in support of its motion for summary judgment does not mention MICH. COMP. LAWS § 440.5109. Likewise, Chem's opening brief in support of its motion for summary judgment does not mention MICH. COMP. LAWS § 440.5109. Accordingly, neither party is entitled to rely on MICH. COMP. LAWS § 440.5109 in seeking summary judgment. See Irwin Seating Co. v. IBM Corp., 2007 WL 518866, *2 n. 2 (W.D.Mich. Feb.15, 2007) (Robert Holmes Bell, C.J.) (“the Sixth Circuit repeatedly has recognized that arguments raised for the first time in a party's reply brief are waived.”) (citing, inter alia, Lexicon, Inc. v. Safeco Ins. Co. of America, Inc., 436 F.3d 662, 676 (6th Cir.2006)). 2 MICH. COMP. LAWS § 440.5108(5) provides, “An issuer shall observe standard practice of financial institutions that regularly issue letters of credit. Determination of the issuer's observation of the standard practice is a matter of interpretation for the court. The court shall offer the parties a reasonable opportunity to present evidence of the standard practice.” 3 For purposes of Matex's motion for summary judgment, the court must assume that Chem made such a request. For purposes of Chem's motion for summary judgment, the court must assume that Chem did not make such a request, if Chem denies making it. In any event, whether or not Chem actually made such a request is immaterial to the disposition of these motions. 4 The LOC provides that it is governed by UCP Publication Number 500. That publication was superseded by UCP Publication Number 600, which Matex cites in its briefs. Matex states that “[a]ny changes between UCP publications do not materially impact [Matex]'s claims.” Matex's Opp/ Reply at 3 n. 2 (citing Ex C and Ex D). Chem has not contradicted this statement, and the court's review of Publications 500 and 600 confirms that the pertinent provisions (Articles 14(b) and 16(b), (d) and (f)) are identical from one version to the next. 5 MICH. COMP. LAWS § 440.5108(4) provides, Failure to give notice specified in subsection (2) or to mention fraud, forgery, or expiration in the notice does not preclude the issuer from asserting[,] as a basis for dishonor[,] fraud or forgery as described in section 5109(1) or expiration of the letter of credit before presentation. Thus, under MICH. COMP. LAWS § 440.5108(4), if Chem failed to timely send a proper notice which specified the alleged presentation defect, it will be precluded from dishonoring the Draw on the basis of that defect. Conversely, Chem's failure to timely send a proper notice which specified fraud or forgery as the basis for dishonor, will not preclude Case 1:16-cv-01301-PLM-PJG E F No. 9-7 filed 03/06/17 PageID.151 Page 11 of 12 International-Matex Tank Terminals-Illinois v. Chemical Bank, Not Reported in... 2009 WL 3270276, 70 UCC Rep.Serv.2d 177 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 11 it from dishonoring the Draw on the basis of fraud or forgery. Chem did not assert a supposed fraud defense, however, until its reply brief, so it has waived that defense. 6 This Michigan statutory subsection has apparently never been discussed by any court. The terms “440.5103(4)” and “section 5103(4)” do not appear in any federal or state decision available on WestLaw. The Michigan Court of Appeals cited section 440.5103 generally during a discussion emphasizing the independence of the LOC from any related or underlying contract. See City Nat'l Bank of Detroit v. Westland Apts., 152 Mich.App. 136, 393 N.W.2d 554 (Mich.App.1986): There are three distinct contracts implicated in a letter of credit transaction. The first is between the issuer and its customer. The second is between the issuer and the beneficiary. The third is between the customer and the beneficiary. The obligations created by these contracts are separate and distinct. As stated in the Official Uniform Commercial Code Comment to UCC 5-114: 1. The letter of credit is essentially a contract between the issuer and the beneficiary and is recognized by this Article as independent of the underlying contract between the customer and the beneficiary (see Section 5-109 and Comment thereto). In view of this independent nature of the letter of credit engagement, the issuer is under a duty to honor the drafts or demands for payment which in fact comply with the terms of the credit without reference to their compliance with the terms of the underlying contract. * * * Id. at 557 (names of parties omitted). 7 “Matex 1” merely denied without prejudice as moot Chem's original motion for summary judgment, because Chem filed a corrected motion for summary judgment without withdrawing the original one. See International-Matex Tank Terminals- Illinois v. Chemical Bank, 2009 WL 1106732 (W.D.Mich. Apr.23, 2009) (Maloney, C.J.) (“Matex 1” ). 8 The parties are advised that “[w]hen a federal court enters a judgment for monetary damages on a state-law claim, ‘federal law controls post-judgment interest but state law governs awards of prejudgment interest.’ ” Pinika, LLC v. MetLife, Inc., --- F.Supp.2d ----, ----, 2009 WL 2713262, *12 (W.D.Mich. Aug.24, 2009) (Maloney, C.J.) (quoting Estate of Riddle v. So. Farm Bur. Life Ins. Co., 421 F.3d 400, 409 (6th Cir.2005)). Postjudgment interest is mandatory under 28 U.S.C. § 1961(a). See Pinika, --- F.Supp.2d at ----, 2009 WL 2713262 at *12 (citing Caffey v. Unum Life Ins. Co., 302 F.3d 576, 586 (6th Cir.2002)). 9 If the parties cannot agree on the amount which the defendant owes to the plaintiff, the notice should identify their areas of disagreement and concisely state their respective positions. In such event, this court will refer the matter to the Magistrate Judge for determination pursuant to 28 U.S.C. § 636(b). 10 The final order will be appealable except to the following extent: “[A]rguments not raised before the district court, including arguments presented for the first time to a district court in a reply brief, generally are considered waived on appeal ....” Shelby Cty. Health Care Corp. v. Majestic Star Casino, Nos. 08-6078 and 08-6419, ---F.3d ----, ----, 2009 WL 2997985, *22 n. 7 (6th Sept. 22, 2009) (citing Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 553 (6th Cir.2008)) (emphasis added). End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG E F No. 9-7 filed 03/06/17 PageID.152 Page 12 of 12 Exhibit 7 Case 1:16-cv-01301-PLM-PJG ECF No. 9-8 filed 03/06/17 PageID.153 Page 1 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 2002 WL 31548620 United States District Court, E.D. Michigan, Southern Division. Douglas Alan STROMBACK, Plaintiff, v. NEW LINE CINEMA, et al., Defendants. No. 01-73898. | Oct. 23, 2002. OPINION AND ORDER OMEARA, J. *1 Before the Court is Defendant New Line Cinema's motion for summary judgment. The crux of this controversy concerns copyright infringement. In late 1998 and early 1999, Plaintiff Douglas Alan Stromback, an actor, aspiring screenwriter, and former professional hockey player, created an original poem entitled “The Keeper.” Plaintiff then created an original treatment and outline of a screenplay based upon “The Keeper” poem, entitled “The Keeper.” According to Plaintiff, various versions of both the poem and screenplays were registered with the Writers Guild of America and the Copyright Office. 1 According to Plaintiff (and not specifically disputed by New Line Cinema), in early 1999, Mr. Stromback showed both the poem and the screenplay for “The Keeper” to Larry Hess and John Apothaker, individuals he had met in Los Angeles. Plaintiff contends that Mr. Hess and Mr. Apothaker passed “The Keeper” poem, treatment, outline, and several versions of screenplays to New Line Cinema. (New Line Cinema states that the Court can assume this “access” is true for purposes of this motion.) After seeing “Little Nicky” in the theater, Plaintiff realized that it contained substantial similarities to his works and filed suit, naming Mr. Hess, Mr. Apothaker, New Line Cinema, and the three credited screenwriters, Adam Sandler, Steven Brill, and Tim Herlihy as Defendants. Plaintiff did not serve summons on Mr. Hess or Mr. Apothaker, and after discussions with New Line Cinema's counsel, dismissed the individual named screenwriters without prejudice, essentially consolidating this action into one directed at the movie's owner/distributor, New Line Cinema. Thus, New Line Cinema is the only Defendant in this litigation. 3 Plaintiff argues that “Little Nicky” and Plaintiff's original works share a number of similarities in theme, character treatment and development, idiosyncratic character traits, and scene selection. Specifically, Plaintiff asserts that “The Keeper” poem (Ex. C to Response) is essentially a thematic prelude to “The Keeper” screenplay (Exhibit D to Response). Plaintiff describes the poem and screenplay as follows: 4 The poem introduces a dark and dreary castle, a gatekeeper, a hellish place. The Keeper senses something is wrong ... somebody wants to leave the castle ground.” The character “has found a way out ... he has found the gate he is going to open ... he has left the castle behind ... and the Keeper is yelling come back, come back.” The screenplay “Keeper” presents a metaphoric story of Ted, a loser, misfit, odd character, battling his “antichrist” devil brother who wants to take over the earth. Ted's character is clearly not wholly of this world: he speaks in rhymes, fights devil voices in his head, napping at work, and traveling peripatetically up and down between a metaphorical hell, the basement in which he works trying to defeat his brother devil, and the world above. Ted is characterized as the white son of black parents. It is later revealed that his mother was an 18 year old who had an affair with a prominent politician, who it is also implied is the father of the antihero of the story, Governor John. The “Keeper” [screenplay] ends with Governor John trying and failing to kill Ted. *2 Plaintiff compares “Little Nicky” to “The Keeper” as follows: “Little Nicky” is portrayed not as a metaphoric, but a literal story taking place between Hell and Earth. In “Little Nicky” the main character, Nicky, is characterized as a loser devil battling his brothers, one of whom is depicted as a black man, to prevent them (and eventually only one of them) from taking over the Earth. Nicky is portrayed as a conflicted character, forever shuttling between Hell below and the Earth above, speaking in “devil” voices, napping at odd times. As does Ted, Nicky reveals his “devilness” at a party, gets accosted by two gang members, gets interested in a woman “above”-- Sue Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.154 Page 2 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 is Ted's interest at the National Paper, Valerie is Nicky's -- and survives a climactic scene where his brother attempts to kill him. Ted's survival occurs as he fools two henchmen sent by Governor John to kill him by pretending his friend is him; Nicky's survival occurs as he fools henchmen sent by his brother into believing he is someone else. In the end, Nicky although he is the son of Satan, discovers his mother is a young-looking angel, and we are to infer his brothers are actually of different mothers. “The Keeper” screenplay begins with Ted, the main character, speaking in rhymes: “I know who not I am but I opened the dam.” As the story begins Ted goes into the basement at the National Paper after obtaining an assignment to look at various old files in the basement. Early on it is established that Ted is the son of a black mother. In the meantime, we are introduced to Governor John, an unbalanced and evil character who wants to be president of the United States. Ted immediately gets angry at the thought of Governor John. Ted meets with his friends in a bar where he reveals himself as a man who speaks in puns-“ass,” “bass. Upon leaving the bar Ted goes home and begins talking to himself again in strange and disturbing rhymes. Ted returns to the basement and starts to write rhyming clues about the Governor. Meanwhile, Governor John is shown sitting complacently with his cronies talking unpleasantly about a party. He says, “Soon I will control everything. God this world is full of stupid [expletive].” Ted is next shown at a house party twitching. “My name is Ted and I am not dead. Nor do I revel with the devil.” Ted confesses he was born in a dark and dreary castle, and that the keeper of that castle owns their flesh and bones. Repeated dungeon references are made throughout the screenplay. Throughout the screenplay Ted is shown napping at odd times. Ted is shown to be interested in a woman named “Sue” also working for the National Paper. Ted approaches Sue through a trick (having Scott, his friend, turn the lights off at the National Paper at 9:10 p.m.) A recurrent theme of the screenplay is Ted's movement between the “dungeon” basement and the world. He is repeatedly ordered to the “dungeon” basement by his boss Dave. Ted reveals that the case he has been reading about in the basement has to do with a cult of the devil, in which Governor John was the prime suspect. He says, “I think he is the anti-Christ.” Throughout this time whenever he is alone, and in the presence of his friends, Ted keeps speaking in rhymes. Ted reveals that he will expose John the anti-Christ to the world. “I think the Governor is the devil which he is.” “The Governor is the keeper.” The screenplay shows Ted speaking in rhymes while listening to a minister on television: “I'm not from the dam but I'm back whose back ... your plan is to be the # 1 man ... because truly you are the devil or at least have the same heart.” Ted has been mailing riddles to the National Paper dropping hints about the Governor. As the screenplay progresses, an image of a reporter on the street appears saying “the frenzy is building.” Governor John decides to kill him. Ted tells him, “I am stopping the soul stealer.” He says, “You're the devil.” As the screenplay progresses, Ted finds out from his black mother that he was adopted from an 18 year old who had an affair with a politician-presumably Governor John's father making Governor John his evil brother or half- brother. A showdown between them is presaged in the story. *3 In the penultimate scene, Governor John's henchmen Maurice and Amir pull up at the National Paper at night, and get by the security guard. In a climatic scene, Ted fools Maurice into thinking that his friend Scott is really Ted and survives Maurice shooting off his gun. Sue comes to the basement to find Ted. In the final treatment, Ted becomes elected Governor and, presumably showing himself to have lost the battle in his head, reveals his own evil and rapes Sue. Plaintiff describes in more detail “Little Nicky”: After the movie opens with a set up scene involving the death of John Lovitz, the “Little Nicky” VHS version shows a visual portrait of a hellish palace and the viewer is introduced to three brothers, Nicky, Adrian and Cassius. Nicky (played by Adam Sandler) is characterized as the subservient brother of the three. As the movie begins, Cassius wants to mind-wrestle with Nicky. We are also introduced to the gatekeeper of hell who tries to keep the dominant brothers Adrian and Cassius from leaving hell. After the dominant brothers Adrian and Cassius do leave hell to go to Earth, Nicky, the son of Satan, is sent up to Earth to retrieve his brothers and return them to hell. From the very beginning of the movie, Nicky goes up and down between hell and earth with much of the action Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.155 Page 3 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 taking place in subterranean locations. For example, the introductory scenes show Nicky hit by a subway and returning to hell before being sent back to Earth. Many other times Nicky returns to hell before going up to the Earth in the movie. Nicky returns to the Earth, he discovers Popeye's Chicken, a recurring theme in the movie. Nicky portrays himself to a roommate on hell as being from the “Deep South.” Nicky sleeps all the time and talks to himself as he sleeps in a sing- song, devilish-sounding voice. As the movie progresses, Nicky gets interested in Valerie, a girl he meets on Earth. At a party with his actor roommate Nicky reveals to the guests that he is a devil. Nicky is on a mission to find Adrian and bring him back down to hell. Adrian has succeeded in causing trouble on Earth in part by occupying the body of New York's mayor. Unknown to humans, the mayor issues various proclamations that cause a frenzy in the City. Adrian wants to find Nicky to kill him so that he does not have to return to hell. Adrian turns into (or inhabits the body of) the Police Commissioner, and finds out where Nicky is hiding-in the subway. In the climactic scene between Nicky and Adrian, Nicky tries to disguise himself as a friend to get away from Adrian in the subway. Nicky survives the attempt to kill him. Nicky then finds out the truth about his mother, who is shown as a 20'ish California Valley girl angel. The movie has a Hollywood ending with Nicky remaining on Earth, marrying Valerie, and fathering a child. Plaintiff's lawsuit against New Line Cinema alleges violations of The Copyright Act, 17 U.S.C. § 106, Lanham Act, 15 U.S.C. § 1125, and various state law claims which are preempted. Although formal discovery has not occurred (and this appears to be the fault of Plaintiff who has not prosecuted his case), New Line argues that the Court can grant summary judgment now because a comparison of the works shows that no reasonable juror could find them substantially similar. While Plaintiff argues that more discovery needs to be taken, the only outstanding discovery that he mentions are the various screenplays of “Little Nicky,” which were never published to the public, and thus are not germane to this dispute. 5 Therefore, the Court grants New Line's motion for summary judgment and dismisses Plaintiff's case in its entirety. However, the Court does not grant New Line's request for attorney's fees and costs to Defendant. 6 STANDARD OF REVIEW *4 The usual summary judgment standard applies: a motion under Fed.R.Civ.P. 56 may be granted if the pleadings and all supporting documentation 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. The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1245 (6th Cir.1995). However, the moving party need not produce evidence showing the absence of a genuine issue of material fact. Rather, “the burden on the moving party may be discharged by ‘showing’-that is, pointing out to the district court-that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The court must view all the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See Bender v. Southland Corp., 749 F.2d 1205, 1210- 11 (6th Cir.1984). Once the moving party discharges its burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. See Fed.R.Civ.P. 56(e); Talley, 61 F.3d at 1245. To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. Consequently, a nonmovant must do more than raise some doubt as to the existence of a fact; the nonmovant must produce evidence that would be sufficient to require submission to the jury of the dispute over the fact. See Lucas v. Leaseway Multi Transp. Serv., Inc., 738 F.Supp. 214, 217 (E.D.Mich.1990). LAW AND ANALYSIS I. Copyright Act (Count I) To establish copyright infringement, a plaintiff must show: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” See Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991); Hi-Tech Video Prods., Inc. v. Capital Cities/ABC, Inc., 58 F.3d 1093, 1095 (6th Cir.1995). Because Plaintiff's ownership of a copyright to “The Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.156 Page 4 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Keeper” is not disputed, the sole question is whether it was copied. 7 Direct evidence of copying is rare, so frequently the plaintiff will attempt to establish an inference of copying by showing (1) access to the allegedly-infringed work by the defendant(s) and (2) a substantial similarity between the two works at issue. See Robert R. Jones Assocs., Inc. v. Nino Homes, 858 F.2d 274, 276-77 (6th Cir.1988); Wickham v. Knoxville Int'l Energy Exposition, Inc., 739 F.2d 1094, 1097 (6th Cir.1984). Here, Defendant has conceded access 8 and focused its attack on the substantial similarity prong. The Court recognizes that this inquiry of “substantial similarity” is inherently factual. As Arnstein v. Porter, 154 F .2d 464 (2nd Cir.1946) noted many years ago, granting summary judgment, particularly in favor of a defendant, is a practice to be used sparingly in copyright infringement cases. Yet, the Sixth Circuit has held that a court may compare the two works and render a judgment for the defendant on the ground that as a matter of law a trier of fact would not be permitted to find substantial similarity. Wickham, 739 F.2d at 1097. In fact, this Court in Burns v. Grier, No 00-CV-70916, 2000 WL 1923514, * 2-3 (E.D.Mich. November 17, 2000)(J. O'Meara) did just this and found no copyright infringement as a matter of law without the question going to the jury. The Court does so here too. *5 In assessing “substantial similarity,” Plaintiff requests that we apply an “extrinsic” test as well as an “intrinsic” test. An “extrinsic” test allows for expert testimony dissecting the works and determining whether they contain similar ideas subject to copyright protection. 9 The “intrinsic” test is essentially the “ordinary observer” test, described below. The “intrinsic” test is usually undertaken without the benefit of experts. See Towler v. Sayles, 76 F.3d 579, 583-84 (4th Cir.1996); Kamar Int'l, Inc. v. Russ Berrie & Co., 657 F.2d 1059, 1062-63 (9th Cir.1981). Significantly, the Sixth Circuit-while not formally adopting a specific approach-has typically used the “ordinary observer” test, which is the traditional standard of analyzing copyright infringement. See Ellis v. Diffie, 177 F.3d 503, 506, n. 2 (6th Cir.1999). The ordinary observer test requires the trier of fact to gauge the similarities of the two works solely on the basis of his “net impression” and without relying on expert analysis or dissection (the “extrinsic test”). Id. This was the approach we used previously in Burns and the one prevalent in this jurisdiction. See, e.g., Winfield Collection, Ltd. v. Sun Hill Industries, Inc., No. 00- CV-74841, 2002 WL 1480832, *4 (E.D. Mich. June 20, 2002) (“[T]he ‘ordinary observer’ test ... is the traditional standard of copyright infringement.”) (citations omitted). Accordingly, we employ it here. As we held in Burns: “Summary judgment for defendant is appropriate even if the court concludes that the similarity between the works concerns a shared idea, if the court also concludes that no reasonable jury, properly instructed, could find the works substantially similar ... The question of whether or not there exists a genuine issue of material fact with respect to the issue of substantial similarity is one of law for the Court.” Burns, 2000 WL 1923514 at * 2 (citations omitted). This Court then conducted a “sideby- side examination” of the two sets of works to determine if a reasonable jury could find substantial similarity. Id. In undertaking this analysis, it is important to remember that “a general impression of similarity is not sufficient to make out a case of infringement.” Mihalek Corp. v. Michigan, 814 F.2d 290, 295 (6 th Cir.1987) (citation omitted). Because ideas and general concepts themselves cannot be copyrighted, it is the court's task to examine the expression of the shared idea for substantial similarity of treatment. Wickham, 739 F.2d at 1097. Here, the net impression of the works is entirely different. “The Keeper” is a story about Ted, a real person, who causes the downfall of the corrupt Governor of California and then takes his job. At the end of the story, Ted abuses his power and rapes a woman that has spurned his affections. Ted often speaks in rhymes and is weird and eccentric. For employment, he organizes files in the basement of a national paper in Los Angeles, which his boss refers to as the “cave” or “dungeon.” The story shifts back and forth to the Governor who hopes to become President. At some point, Ted-who is reading old newspaper files-finds out that the Governor (then Secretary of State) was involved in a cult having something to do with the devil and got off the hook for a murder. Ted figures out that the Governor was responsible for the murder and undertakes an anonymous campaign of sending rhyming riddles to the newspaper that will ultimately reveal that the Governor is the murderer, the antichrist and the devil. (The use of terminology referring Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.157 Page 5 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 to the devil and hell are all metaphoric-the Governor is not really the devil.) *6 Eventually, the Governor figures out that the newspaper's riddles implicate himself and then sends someone to kill the “rhyming dude.” Ted reveals himself and dares the Governor to kill him. The Governor orders his murder but Ted sets a trap for his friend, Scott, who the Governor's henchmen mistakenly think is Ted. They kill Scott thinking he is Ted. Ted videotaped the whole trap and sends it to the police. The Governor is arrested and Ted becomes the new Governor and rapes a woman. “Little Nicky” is actually about the devil and his three sons, Cassius, Adrian, and Nicky. Adrian and Cassius pick on Nicky, the simple and sweet son, and mind wrestle with him causing him to say things he would otherwise not say. When the movie opens, the devil (Satan)is considering retiring after 10,000 years and his sons Adrian and Cassius want the job. Nicky wants his father to keep it. Satan decides to rule for another 10,000 years to maintain the balance of good and evil, and this greatly upsets Adrian and Cassius who concoct a plan to escape hell, travel to earth, and corrupt as many souls as possible to threaten the balance of good and evil. When they leave hell, they clog the portal, thus not allowing new souls to enter hell. Satan begins to decompose (literally, at one point he is a talking mouth) and sends his son Nicky after them to “bottle” them up and bring them back to hell. Nicky reluctantly travels to earth and dies several times coming back to hell, only to be dispatched to earth once again by his decomposing father, Satan. On earth, Nicky meets a woman Valerie and falls in love. At one point, he dies trying to save her from a speeding train and is sent to heaven (and not hell) where he meets his mother, an angel, who tells him that he must release his inner good to battle his brothers on earth. She gives him a magic sphere from God to help him battle his brothers, On earth, his brothers Adrian and Cassius are invading people's bodies and causing them to say and do things. They invade the mayor of New York and a preacher and cause them to say things to instigate corruption, like lowering the drinking age to 10. New York becomes a mess of corruption. Eventually, at the end, Nicky smashes the sphere from God and Ozzy Osbourne is released and bites the head off Adrian (who had turned into a bat). With both brothers in the bottle, Valerie kills Nicky by hitting him in the head with a rock (out of love), sends him back to hell, just in time to save his father. Satan survives, the brothers are forever trapped in the bottle, and the balance of evil and good is restored. Satan sends Nicky back to earth where he marries Valerie, has a son, and lives happily ever after. The stories are entirely different. While both Nicky and Ted are weird and eccentric, only Ted talks in rhymes. Nicky has a speech impediment because his brothers beat him with a shovel when he was little. Ted works in a newspaper basement and causes the downfall of the Governor. He is attracted to a woman whom he eventually rapes. Imagery of hell and the devil are used as metaphors. In contrast, Nicky is a simple-minded, sweet, actual son of the devil who has to defeat his devil brothers on earth. “Little Nicky” is a comedy with a happy ending, while “The Keeper” is a bleak story with no apparent humor. There are too many differences to list. The overriding point is that the setting, characters, and events are very different between the two works, and the Court finds as a matter of law that no reasonable jury properly instructed would find otherwise. *7 The similarities that Plaintiff relies on are all superficial. While both works employ similar words such as the “devil,” clearly the concept of hell and the devil are not protected expressions. While the basement is described as a hellish place, it is not really hell, as is the setting in “Little Nicky.” While both works share a theme of “good versus evil,” such a theme is commonplace and not protected. While Plaintiff argues that the sequence of events is similar (i.e. leaving hell (or the basement), bottling/battling brother (Ted is presumably the brother of the Governor in “The Keeper”, although this is not conclusively established), attempted killing of main character), this is not enough to create a genuine issue of material fact on the issue of substantial similarity. The use of “up and down imagery” as Plaintiff argues also is not enough, especially where Nicky is literally going back and forth from hell and earth, and Ted simply leaves the basement at the end of the work day. While there is a love interest in both works, one ends in marriage and the other in rape, and love is a common thread throughout many works of art. There are also other trivial similarities such as racial allusions and supporting characters that are de minimis and not worth addressing in detail. Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.158 Page 6 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 After watching “Little Nicky” and comparing it to “The Keeper,” the Court finds that a reasonable person would not conclude that the Defendant unlawfully appropriated Plaintiff's protected expression by taking material of substance and value. Although there are some similarities between the works as described above, a close examination reveals there is no substantial similarity and that an average reasonable layperson upon such examination could not find substantial or sufficient similarity to establish copyright infringement. Plaintiff has various responses that will only be briefly addressed. He argues that Defendant failed to establish “independent creation” as a defense to copyright infringement. Yet, as Defendant points out in its response, independent creation is a defense that can be made after Plaintiff establishes his prima facie case. Because Plaintiff has failed to establish “substantial similarity” between the works, Defendant does not need to argue “independent creation” in rebuttal. See Ellis v. Diffie, 177 F.3d at 507 (“[A]n inference of copying is rebuttable by evidence of independent creation of the allegedly infringing work .”). Finally, Plaintiff argues that New Line failed to attach the screenplay of “Little Nicky” as an exhibit, and that we are only analyzing whether the movie of “Little Nicky” infringes “The Keeper.” 10 Therefore, according to Plaintiff, there needs to be discovery because there could be infringement on the “intermediary acts” of the various screenplays leading up to the final product, the released movie. Yet, only the video or movie was published to the public-not the screenplays-and Plaintiff only alleges in his complaint that the movie is an infringing work-not the underlying scripts. 11 Therefore, because the Court does not see how additional discovery would make a difference, and because Plaintiff's counsel at the hearing did not articulate a compelling reason for more discovery, the Court finds that we have enough information at this juncture to grant Defendant's summary judgment motion on the copyright infringement claim. II. Lanham Act (Count V) *8 Plaintiff also argues that the public would likely be confused if presented with “Little Nicky” and “The Keeper” such that New Line Cinema is liable for reverse passing off under § 43(a) of the Lanham Act. As Defendant points out, however, this Circuit has dismissed a § 43(a) claim where the court has determined that no substantial similarity exists. See Milhalek, 814 F.2d at 296 (dismissing Lanham Act claim for same lack of substantial similarity which undermined copyright claim). While Plaintiff argues that there is no inconsistency between application of the Copyright Act and the Lanham Act, this is not the relevant inquiry. Indeed, both a Lanham and Copyright claim may coexist if there is substantial similarity between the two works. Thus, because there is no substantial similarity between the works, this claim is also dismissed. III. Preemption Plaintiff's commercial misappropriation claim (Count II), breach of quasi contract claim (count III), misappropriation of trade secrets under Michigan and California law (count VI), breach of implied duty of good faith and fair dealing (Count VII), unfair competition/ unjust enrichment (Count VIII) and interference with prospective economic advantage (Count IX) are all preempted by state law. 12 Plaintiff even concedes in his response that Count III for breach of quasi contract and Count VIII for unfair competition/unjust enrichment are preempted based on the Sixth Circuit's holdings in Wrench v. Taco Bell Corp., 256 F.3d 446 (6 th Cir.2001) and Murray Hill v. ABC Communications, Inc., 67 F.Supp.2d 754, 762 (E.D.Mich.1999), aff'd in part, 264 F.3d 622, 638 (6 th Cir.2001). Yet, Plaintiff argues that his other state law claims are not preempted. Under § 301 of the Copyright Act, a state common law or statutory claim is preempted if (1) the work is within the scope of the subject matter of the copyright and (2) the rights granted under state law are equivalent to any exclusive rights within the scope of federal copyright. Wrench, 256 F.3d at 453. Plaintiff correctly maintains that if there is an “extra-element” that changes the nature of action so that it is qualitatively different from a copyright infringement claim, then there is no preemption of the state cause of action. Yet, none of Plaintiff's state law claims contain such an “extra-element.” First, with respect to Plaintiff's breach of the implied duty of good faith and fair dealing (Count VII), as Defendant points out in its reply, this claim must be dismissed because it cannot exist in the absence of an actual, valid contract. See Van Arnem Co. v. Manufacturers Hanover Leasing Corp., 776 F.Supp. 1220, 1223 (E.D.Mich.1991). Because Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.159 Page 7 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 Plaintiff's breach of quasi-contract claim is preempted (a fact conceded by Plaintiff), then this claim fails as well. (Plaintiff does not even address this count in his response.) Second, Plaintiff's commercial misappropriation claim (Count II) and misappropriation of trade secrets (Count IV) are also preempted. There are no “extra-elements” that would distinguish these causes of action from the exclusive rights granted by the Copyright Act. 13 See Artie Fields Prods., Inc. v. Channel 7 of Detroit, Inc., No. 94-CV-70730, 1994 WL 559331, at * 2 (E.D. Mich. June 10, 1994) (holding that “commercial misappropriation” claim was preempted by Copyright Act because claim was “grounded solely in the copying of a plaintiff's protected expression” and was thus not “qualitatively different from a copyright infringement action”); Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1192 (C.D.Cal.2001) (holding that “misappropriation” claim was preempted by Copyright Act because claim alleged misappropriation of story and characters that were within the subject matter of copyright). Plaintiff's misappropriation of trade secret claim is substantively no different than his commercial misappropriation claim- both allege that Defendant stole his protected expression of “The Keeper.” Because both of these claims fall within the subject matter of the copyright, they are hence preempted. *9 Finally, Plaintiff's interference with prospective economic advantage claim (Count IX) is also preempted. See Aqua Bay Concepts, Inc. v. Grosse Pointe Board of Realtors, No. 91-CV-74819, 1992 WL 350275, at * 4 (E.D.Mich. May 7, 1992) (holding that interference with contractual relationship claim was preempted by Copyright Act because “alleged ‘tortious interference’ rest[ed] upon [the defendants'] ‘act of copying and distributing plaintiff's copyrighted work-acts that are clearly contrary to the rights encompassed with Section 106 of the Copyright Act of 1976.” ’; Idema, supra, 162 F.Supp.2d at 1193 (same). Plaintiff fails to distinguish these cases and instead asserts-without any support- that his tortious interference claim contains an extra element of wrongful purpose in taking of the work. Because such a wrongful purpose is already encompassed by the Copyright Act, and Plaintiff cites no authority stating otherwise, this argument is rejected. IV. Attorney's Fees and Costs Defendant requests that we grant it attorney's fees and costs pursuant to § 505 of the Copyright Act. This is a matter in our “equitable discretion” guided by consideration of several non-exclusive factors, including “frivolousness, motivation, objective unreasonableness and deterrence.” Cross Keys Publ'g Co v. Wee, Inc., 921 F.Supp. 479, 482 (W.D.Mich.1995) (citation omitted). Defendant argues that the copyright claim has been utterly frivolous and objectively unreasonable from its inception, pointing out that Plaintiff had to drop the movie “Mr. Deeds” from its complaint and eventually dropped the credited screenwriters, Adam Sandler, Steven Brill, and Tim Herlihy from this litigation (after Defendants filed a motion to dismiss) and did not even serve summons on Mr. Hess and Mr. Apothaker. Defendant maintains that Plaintiff is trying to extract settlement value from New Line Cinema, the deep-pocket film studio, after dismissing the other Defendants. Furthermore, Plaintiff has failed to prosecute this case by setting a scheduling conference and refused to provide New Line with a copy of “The Keeper”-forcing it to contact the U.S. Copyright Office. While Plaintiff has not been very cooperative and did seem to file an overbroad complaint (and then dismissed various Defendants and claims as the litigation continued), the Court does not believe Plaintiff's behavior has been so egregious as to warrant attorney's fees and costs. There is no direct evidence that Plaintiff's claims were not brought in good faith 14 and, for the most, were warranted under existing law, even though they were found to be meritless in the end. Given the Act's grant of discretion and the factors that are to be balanced, the Court does not think it should exercise its discretion to award attorney's fees and costs. See, e.g., Murray Hill, 264 F.3d at 639-40 (reversing district court's award of attorney fees in Copyright Act case where claims were colorable, albeit meritless). ORDER *10 It is hereby ORDERED that Defendant's motion for summary judgment is GRANTED IN PART. Plaintiff's case is DISMISSED in its entirety but there is no awarding of attorney's fees and costs. Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.160 Page 8 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 All Citations Not Reported in F.Supp.2d, 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 Footnotes 1 Defendant New Line Cinema argues that only the screenplay and not the poem of “The Keeper” were federally registered, and thus compares “Little Nicky,” the alleged infringing work, to only the registered screenplay. In his response, Plaintiff explains that the poem was also copyrighted under Registration No. TXU 893-361 but that he erroneously did not include this number in the complaint. (Apparently, Plaintiff has refused to provide New Line with a copy of either the poem or screenplay of “The Keeper”, thus forcing New Line to contact the U.S. Copyright office for copies of the works. When New Line could not locate the poem, it questioned whether it was federally registered.) Accordingly, Plaintiff requests that we consider the poem version as registered, or allow him to amend the complaint. For the reasons discussed above in the text, even if we consider the poem as copyrighted and federally registered, no reasonable juror could find substantial similarity between the poem and the movie, “Little Nicky.” Because the Court is granting Defendant's summary judgment motion, there is no need to allow Plaintiff to amend the complaint. The Plaintiff should know, however, that the Court considered the poem when making this ruling. 3 Initially, Plaintiff also included the movie “Mr. Deeds” as an infringing work, but subsequently dropped that allegation. Therefore, the only claim remaining is against New Line Cinema for its movie “Little Nicky.” 4 The Court quotes at length from Plaintiff's response (pages 3-7; citations omitted) because his description of the two works is important to consider because the Court ultimately rules against him at this stage of the litigation. As explained infra, even his descriptions-which point out similarities between the two works-illustrate overall that the two works are entirely different stories, and it would be incredibly hard to see any relation between the two if not for Plaintiff's assertion of similar themes, which as explained infra, are, in fact, very different. 5 Also, in Plaintiff's complaint, he only alleges that the movie “Little Nicky” is an infringing work-not the various screenplays. 6 At the hearing on this matter on October 25, 2002, defense counsel also requested that the Court sanction Plaintiff's counsel for bringing forth this frivolous case. While the Court dismisses Plaintiff's case with prejudice, we do not find that it was so frivolous to merit monetary sanctions. 7 Again, for purposes of this motion, we are considering both the poem and screenplay of “The Keeper” as properly copyrighted because Plaintiff has submitted evidence in his response that the poem was registered-he just forgot to include the registration number in his complaint. 8 In his response, Plaintiff makes much of this “access” prong, arguing that it is intertwined with the analysis of substantial similarity and that there needs to be discovery on this issue. Plaintiff is correct that, if access is established (and Defendant has conceded for the purposes of this motion that it has been, so there is no need for discovery on this point to decide this motion), then the showing of substantial similarity can be less. See Ellis v. Diffie, 177 F.3d 503, 506 (6th Cir.1999)(recognizing that the degree of proof of access is inversely proportional to the strength of similarity between the two works at issue). Yet, as Defendant points out, there still must be a showing of substantial similarity between the works irrespective of the access question. See Wickham, 739 F.2d at 1097-98 (“The district court correctly concluded there exists no substantial similarity. Therefore, it became unnecessary to resolve the access issue. No amount of proof of access will suffice to show copying if there are no similarities.” ) (citation omitted) (emphasis added). As discussed above, the Court finds that there is not enough similarity to create a jury question, even with access being conceded by Defendant. 9 If the “extrinsic” test were the one employed by the Sixth Circuit, then we obviously could not grant Defendant's summary judgment motion right now as there has not been any expert discovery yet. But, as explained above, this is not the approach in this jurisdiction. 10 Plaintiff insinuates that the home video of Little Nicky (attached as an exhibit) is different than the actual movie theatrically released to the public, thereby implying that we do not have the relevant evidence before us to make an informed decision about substantial similarity. Yet, in New Line's reply, it attaches a declaration from Jeffrey Halsey, Vice-President of Video Services for New Line, attesting that the videocassette version is the same as the version released in theaters. 11 In Walker v. Time Life, 615 F.Supp. 430, 434, n 2 (S.D.N.Y.1985), the court rejected this “intermediary acts” argument: “The Court considers the works as they were presented to the public. Plaintiff requests the court to compare the two works on the basis of lists of random similarities and on earlier scripts of the screenplay. This request is denied. Courts have Case 1:16-cv-01301-PLM-PJG EC No. 9-8 filed 03/06/17 PageID.161 Page 9 of 10 Stromback v. New Line Cinema, Not Reported in F.Supp.2d (2002) 2002 WL 31548620, 2003 Copr.L.Dec. P 28,551 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 routinely rejected requests to consider earlier drafts of the screenplay. Consideration of earlier versions of the screenplay is too unreliable in determining substantial similarity.” (Emphasis added) (citations omitted). 12 Count IV for breach of quasi-contract against Mr. Hess and Mr. Apothaker has been voluntarily dismissed by Plaintiff. 13 Cases have held that a confidential or fiduciary relationship can be an “extra-element” foreclosing the preemption argument. See Artie Fields, 1994 WL 559331 at * 2 (citation omitted). Yet, Plaintiff does not argue that there was such a fiduciary relationship between the parties in the case sub judice. 14 Defendant did concede “access,” for instance. End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-8 filed 03/06/17 PageID.162 Page 10 of 10 Exhibit 8 Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.163 Page 1 of 6 Farah v. Federal Nat. Mortg. Ass'n, Not Reported in F.Supp.3d (2014) 2014 WL 1305069 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Blue Flag - Appeal Notification Appeal Filed by FRANCOIS FARAH, ET AL v. FNMA, ET AL, 6th Cir., May 8, 2014 2014 WL 1305069 Only the Westlaw citation is currently available. United States District Court, E.D. Michigan, Southern Division. Francois A. FARAH and Francois A. Farah Revocable Living Trust, Plaintiffs, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION and Seterus, Inc., Defendants. No. 13-CV-11787. | Signed March 31, 2014. Attorneys and Law Firms William Farah, William Farah, PLLC, Ann Arbor, MI, for Plaintiff. Erin M. Pawlowski, Ari M. Charlip, Dickinson Wright, Troy, MI, for Defendants. OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) MARIANNE O. BATTANI, District Judge. *1 Before the Court is Defendants Federal National Mortgage Association (“Fannie Mae”) and Seterus, Inc.'s Motion to Dismiss under Fed R. Civ. P. 12(b)(6). (Doc. No. 5). The Court has reviewed all the relevant filings and finds that oral argument will not aid in resolving this dispute. See E.D. Mich. LR 7.1(f)(2). For the reasons discussed below, the Court GRANTS Defendants' motion and dismisses all of Plaintiffs' claims. I. STATEMENT OF FACTS On March 1, 2002, Plaintiffs Francois A. Farah (“Farah”) and the Francois A. Farah Revocable Living Trust purchased Farah's home at 1909 Ramsay Blvd., Flint, Michigan. (Doc. No. 1-1, ex. A, at 29). Plaintiffs obtained a $180,800 loan, secured by a mortgage on the property granted to Citizens Bank. (Doc. No. 1-1, Ex. A, at 29). Citizens Bank assigned the mortgage to Chase Mortgage Company on March 1, 2002, an action that was not recorded until September 2002. (Doc. No. 1-1 at 5). The mortgage was assigned to Mortgage Electronic Registration Systems, Inc. (“MERS”) in September 2010 (Doc. No. 1-1 at Ex. C). MERS then assigned the mortgage to Federal National Mortgage Association (“Fannie Mae”) in April 2012. (Doc. No. 1-1 at Ex. D). Defendant Seterus, Inc. (“Seterus”) is the loan servicer. All of Farah's claims stem from the same allegations of improper conduct on the part of Seterus. Farah alleges that he made several requests to Seterus for foreclosure alternatives in early 2012, including a request for a deed in lieu of foreclosure in March 2012, a request for mediation prior to foreclosure in May 2012, a Home Affordable Modification Program loan modification in July 2012, and a deed in lease program in August 2012. (Doc. No. 1-1 at 7-9). Farah alleges that Seterus made a number of misrepresentations to him about his eligibility for foreclosure alternatives. (Doc. No. 1-1 at 12-13). Farah also alleges that Seterus purposely delayed consideration of foreclosure alternatives by repeatedly requesting documents that it had already received as a stall tactic so that it could foreclose and keep him from redeeming the property. (Doc. No. 1-1 at 14). Plaintiffs defaulted on the mortgage in 2012, but the record is not clear precisely when this happened. After sending Plaintiffs a housing counselor and foreclosure notice as required by Michigan law, Fannie Mae began foreclosure by advertisement proceedings in August 2012. Fannie Mae purchased the property at the foreclosure sale, which took place on September 26, 2012. (Doc. No. 1-1, Ex. I, at 62). On March 22, 2013, Plaintiffs filed a lawsuit in Genesee County Circuit Court, alleging nine counts against Defendants. Plaintiffs did not redeem the property before the redemption period's expiration on March 26, 2013. Defendants removed this case to federal court on April 22, 2013. II. STANDARD OF REVIEW In reviewing a motion to dismiss, the court “must construe the complaint in the light most favorable to the plaintiff [and] accept all factual allegations as true.” In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir.1993). This standard does not require the court to accept as true Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.164 Page 2 of 6 Farah v. Federal Nat. Mortg. Ass'n, Not Reported in F.Supp.3d (2014) 2014 WL 1305069 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 legal conclusions, conclusory statements, or “threadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). *2 To survive a motion to dismiss, the plaintiff must “state a claim for relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Plausibility “requires showing more than the sheer possibility of relief but less than a probable entitlement to relief.” Fabian v. Fuller Helmets, Inc., 628 F.3d 278, 280 (6th Cir.2010) (citations and internal quotation marks omitted). Rule 12(d) provides that “[i]f, on a motion under Rule 12(b)(6) ... matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). A court may consider “documents incorporated into a complaint by reference and matters of which a court may take judicial notice” without converting the motion into one for summary judgment. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007). Moreover, when documents are referenced in a complaint and are central to the claims, the court may consider them in resolving a motion to dismiss. Weiner v. Klais and Co., 108 F.3d 86, 88 (6th Cir.1997) (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993)). III. ANALYSIS Plaintiffs' nine-count complaint has federal and state claims of both a legal and equitable nature: (1) violation of the federal Truth in Lending Act; (2) civil conspiracy; (3) foreclosure is barred by unclean hands; (4) breach of contract; (5) intentional fraud; (6) constructive fraud; (7) violation of the Federal Fair Debt Collection Practices Act; (8) violation of Michigan's Regulation of Collection Practices Act; and (9) violation of Michigan's Occupational Code. Each count is addressed below. A. Truth in Lending Act Claim Farah claims that Defendants violated the Truth in Lending Act, 15 U.S.C. § 1641(g)(1) (“TILA”). Specifically, Plaintiffs claim that they were not notified of the mortgage assignment and change in creditor within 30 days, as the statute requires. Farah seeks the maximum statutory damages permitted under the statute. Under the statute of limitations for TILA violations, a lawsuit must be brought “within one year from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e). This means that the statute of limitations begins when there is a cause of action and the plaintiff “can file suit and obtain relief.” Wike v. Vertrue, Inc., 566 F.3d 590, 593 (6th Cir.2009) (internal quotations omitted); see also Thielen v. GMAC Mortgage Corp., 671 F.Supp.2d 947, 953 (E.D.Mich.2009) (quoting Wike ). According to Farah's complaint, the Mortgage was assigned from Citizens Bank to Chase Mortgage Company on March 1, 2002, the same day Farah obtained the mortgage. Chase Mortgage Company then assigned the mortgage to Federal National Mortgage Association (“Fannie Mae”), with Mortgage Electronic Registration Systems, Inc. (“MERS”) as nominee in September 2010. (Doc. No. 1-1 at Ex. C). Plaintiffs allege that Fannie Mae has owned the indebtedness since July 2010. (Doc. No. 1- 1 at 6). Plaintiffs filed their lawsuit on March 22, 2013. *3 Plaintiffs did not bring this claim within the one- year statute of limitations, so this claim is barred. Moreover, Plaintiffs are also not entitled to equitable tolling of the statute of limitations because they fail to show that there was fraudulent concealment of the mortgage note, the transfer, or any of its terms. See Jones v. TransOhio Sav. Ass'n, 747 F.2d 1037, 1041-43 (6th Cir.1984) (holding equitable tolling proper in a TILA case that alleged fraudulent concealment of a variable interest rate provision and of the mortgage note itself). see Fed.R.Civ.P. 9(b ) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake”) and Frank v. Dana Corp., 547 F.3d 564, 569-70 (6th Cir.2008) (holding that under Rule 9(b), “[a]t a minimum, Plaintiffs must allege the time, place and contents of the misrepresentations upon which they relied”). Plaintiffs allege that Defendants “hid the true creditor” from them and that Plaintiffs were not informed of the mortgage note transfer. These allegations do not rise to the level of specificity required of fraud allegations in order to survive a motion to dismiss. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In addition, this allegation cannot be reconciled with Farah's allegation that he attempted to negotiate foreclosure alternatives in 2012, because if he did not Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.165 Page 3 of 6 Farah v. Federal Nat. Mortg. Ass'n, Not Reported in F.Supp.3d (2014) 2014 WL 1305069 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 know who the creditor was he would not have been able to engage in these negotiations. (See Doc. No. 1-1 at 6-7). B. Breach of Contract and Unclean Hands Farah brings a breach of contract claim based on Defendants' violation of the duty of good faith and fair dealing. In Michigan, breach of the implied duty of good faith and fair dealing is a basis for a breach of contract action in Michigan, not an independent tort action. McLiechey v. Bristol W. Ins. Co., 408 F.Supp.2d 516, 522- 23 (W.D.Mich.2006) aff'd sub nom McLiechy v. Bristol W. Ins. Co., 474 F.3d 897 (6th Cir.2007). The implied covenant only applies where one party to the contract has discretion in its performance under the contract. Id., see also Ferrell v. Vic Tanny Intern., Inc., 137 Mich.App. 238, 357 N.W.2d 669, 672 (Mich.Ct.App.1984). For any breach of contract claim, a plaintiff must establish three elements by a preponderance of the evidence: (1) the existence of a contract between the parties; (2) the other party breached the contract; and (3) the plaintiff suffered damages. Miller-Davis Co. v. Ahrens Const., Inc. (On Remand), 296 Mich.App. 56, 817 N.W.2d 609, 619 (Mich.Ct.App.2012) appeal granted in part, 494 Mich. 861, 831 N.W.2d 234 (Mich.2013) and appeal granted, 838 N.W.2d 706 (Mich.2013) (citations omitted). Farah alleges that the mortgage includes language that gives Defendants discretion to modify Farah's loan, and that their failure to do so was a result of bad faith negotiations during the pre-foreclosure mitigation period and the redemption period. Farah also seeks relief based on the doctrine of unclean hands, alleging that defendants negotiated in bad faith as to processing Farah's mortgage loan, request for modification, short sale, deed in lieu of foreclosure, and deed for lease. Because both claims rely on Defendants' alleged bad faith in the loan modification process, they will be analyzed together. Plaintiffs seek to have the foreclosure sale enjoined. *4 Plaintiffs base their claim on a breach of the implied duty of good faith and fair dealing as it relates to Defendants' discretion to modify their mortgage. But according to the pleadings, the underlying contract giving rise to the breach of contract claim is the mortgage itself. It does not follow that a breach of contract claim can happen based on the implied duty of good faith and fair dealing when the discretion involved was the discretion to modify the contract, rather than discretion as to the manner of performance under the contract itself. See Ferrell v. Vic Tanny Int'l, Inc., 137 Mich.App. 238, 357 N.W.2d 669, 672 (Mich.Ct.App.1984) (“Where a party to a contract makes the manner of its performance a matter of its own discretion, the law does not hesitate to imply the proviso that such discretion be exercised honestly and in good faith.”) (citation omitted). The parties did not have a contract agreeing to modify the mortgage, so there can be no breach of contract action based on an implied duty of good faith. Plaintiffs do not allege that there was a contract independent of the mortgage. Because the implied duty of good faith and fair dealing must relate to an actual underlying contract, rather than negotiations to modify a contract, Plaintiffs have failed to state a breach of contract claim based on the implied duty of good faith and fair dealing. C. Fraud Claims Farah also claims that Defendants committed intentional fraud or, alternatively, constructive fraud by means of false representations during the loan modification process. Specifically, Farah claims that Defendants falsely represented that he was missing documents or that they never received his applications for foreclosure alternatives. Farah claims that this was purposeful conduct as part of a delay tactic to essentially stall Farah into foreclosure with endless paperwork. (Doc. No. 1-1 at 16-19). Under Fed.R.Civ.P. 9(b), plaintiffs are required to state with particularity the circumstances constituting fraud. Therefore, a complaint must “(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” Frank v. Dana Corp., 574 F.3d 564, 569-70 (6th Cir.2008) (quoting Gupta v. Terra Nitrogen Corp., 10 F.Supp.2d 879, 883 (N.D.Ohio 1998). This means that a plaintiff must at minimum state where and when the misrepresentation took place and what was said. Id. (citing Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir.1984). Farah's complaint falls short of these requirements. At no point does Farah state when the misrepresentations took place, or who gave the misrepresentations. Farah also does not explain in much detail what was said. Because Farah's fraud allegations require the Court to fill in too many blanks, the fraud claims cannot stand. Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.166 Page 4 of 6 Farah v. Federal Nat. Mortg. Ass'n, Not Reported in F.Supp.3d (2014) 2014 WL 1305069 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Even if Farah were able to meet the Rule 9(b) fraud pleading requirements, he failed to redeem the property during the six-month statutory redemption period following the sheriff's sale. Filing a lawsuit does not toll the redemption period. Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 360 (6th Cir.2013). Under Michigan law, legal title to a foreclosed property vests in the holder of the sheriff's deed unless the property is redeemed within the six-month statutory redemption period. See Mich. Comp. Laws § 300.3236- 3240. Consequently, a plaintiff must allege a clear showing of fraud or irregularity to maintain an action for an equitable extension of the redemption period. Conlin, 714 F.3d at 360 (citing Overton v. Mortgage Electronic Registration Sys., Inc., No. 284950, 2009 WL 1507342, at *1 (Mich.Ct.App. May 28, 2009). It is a “high standard” and the fraud “must relate to the foreclosure procedure itself.” Id. (quoting El-Seblani v. IndyMac Mortg. Servs., 510 F. App'x 425, 429-30, No. 12-1046, 2013 WL 69226, at *4 (6th Cir. Jan.7, 2013). Further, defects in the foreclosure proceeding merely render the foreclosure voidable, rather than void ab initio. Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 98, 825 N.W.2d 329 (Mich.2012). In addition to a clear showing of fraud or irregularity in the foreclosure process, a plaintiff must demonstrate prejudice resulting from the defect. Id. at 337. To do this, a plaintiff must show their position would have been better “to preserve their interest in the property.” Id. *5 Farah alleges fraud during the loan modification process, rather than the actual foreclosure process. Even if his allegations were generously construed to allege fraud in the foreclosure process, these allegations still fall short of Rule 9(b) pleading requirements for fraud. Because his allegations fall far short of both the “clear showing” standard to warrant equitable extension of the redemption period, and the Rule 9(b) pleading requirements for fraud, this claim must be dismissed. D. Federal and State Statutory Violations In Counts 7, 8, and 9, Farah claims that Seterus violated the Federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, Michigan's Regulation of Collection Practices Act (“RCPA”), Mich. Comp. Laws § 445.251 et seq., and alternatively, the Michigan Occupational Code, Mich. Comp. Laws § 339.901 et seq. In each of these claims, Plaintiffs' allegations are limited to a recital of provisions of each of these laws that Defendants allegedly violated, without a factual basis to support these claims. Plaintiffs do not state any facts in either the common allegations or the allegations under each of these counts that could even generously be construed as violations of any of the above statutes. Plaintiffs do not state that they were subjected to harassment in an attempt to collect a debt, or that they were injured in any way by a violation of these laws. Because Plaintiffs' allegations are limited to “threadbare recitals” of the statutory provisions, Plaintiffs have not stated a claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). E. Civil Conspiracy Farah claims that Defendants conspired with one another to commit fraud and to violate federal and state debt collection laws, in order to force Farah to foreclose. The foreclosure would allow Fannie Mae and Seterus to reap some benefits, such as private mortgage insurance money and federal bailout funds. (Doc. No. 1-1 at 13). Specifically, Farah claims that Seterus employed a stall tactic of conflicting communications and asking him to submit the same documents over and over so that foreclosure would take place sooner. (Doc. No. 1-1 at 14). In Michigan, civil conspiracy is defined as “a combination of two or more persons, by some concerted action, to accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or unlawful means.” Urbain v. Beierling, 301 Mich.App. 114, 835 N.W.2d 455, 463 (Mich.Ct.App.2013) (quoting Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass'n, 257 Mich.App. 365, 670 N.W.2d 569, 580 (Mich.Ct.App.2003), aff'd, 472 Mich. 91, 693 N.W.2d 358 (Mich.2005)). Establishing concerted action requires a plaintiff to prove “ ‘that all defendants acted tortiously pursuant to a common design’ that caused harm to the plaintiff.” Id. (quoting Abel v. Eli Lilly & Co., 418 Mich. 311, 343 N.W.2d 164 (Mich.1984)). Civil conspiracy is not actionable as a standalone claim; it requires an underlying tort. See, e.g., Cousineau v. Ford Motor Co., 140 Mich.App. 19, 363 N.W.2d 721, 730 (Mich.App.1985) (citations omitted). *6 In this case, Farah has alleged a variety of underlying torts that were already discussed; fraud, constructive fraud, violation of the Federal Fair Debt Collection Practices Act, and violation of Michigan's Regulation of Collection Practices Act. (Doc. No. 1-1 at 13). Farah alleges that Defendants “conspired with one another,” Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.167 Page 5 of 6 Farah v. Federal Nat. Mortg. Ass'n, Not Reported in F.Supp.3d (2014) 2014 WL 1305069 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 intending to commit these torts. (Doc. No. 1-1 at 13). Defendant argues that Farah's allegations are not sufficient to infer an agreement between Fannie Mae and Seterus to do anything wrongful. Farah's allegations are sufficient to at least state a civil conspiracy claim, because Farah alleges that Seterus stalled Farah's paperwork for his foreclosure alternative applications so that Fannie Mae could foreclose and gain a profit from his property. (Doc. No. 1-1 at 13-14). But Farah's civil conspiracy claim must fail, because all of the claimed underlying torts are dismissed, thus removing the support required for this claim to stand. IV. CONCLUSION For the reasons stated, the Court GRANTS Defendant's Motion to Dismiss on all counts. IT IS SO ORDERED. All Citations Not Reported in F.Supp.3d, 2014 WL 1305069 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01301-PLM-PJG ECF No. 9-9 filed 03/06/17 PageID.168 Page 6 of 6