COLEMAN-NICHOLS v. TIXON CORPORATION
Case Details
- Citation
- 203 Mich. App. 645
- Judge(s)
- Before: Gribbs, P.J., and Shepherd and P. E. Deegan, JJ.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Court of Appeals affirmed the trial court's denial of summary disposition on sex discrimination and fraudulent conveyance claims, allowing them to proceed to trial, but reversed and dismissed the wrongful discharge and tortious interference claims. The sex discrimination claim survived on theories of both intentional discrimination and disparate treatment, with genuine issues of fact regarding whether the plaintiff was treated differently than similarly situated male coworkers.
Excerpt
COLEMAN-NICHOLS v TIXON CORPORATION Docket No. 145235. Submitted November 3, 1993, at Detroit. Decided February 22, 1994, at 9:15 A.M. Beverly Coleman-Nichols brought an action in the Wayne Circuit Court against Tixon Corporation, William Herbert, Tixon’s general manager, and Armanda Herbert, Tixon’s president, alleging sex discrimination, wrongful discharge from employment, intentional infliction of emotional distress, defamation, and fraudulent conveyance against all three defendants and interference with contractual relations against Armanda Herbert individually. The court, James J. Rashid, J., granted summary disposition for the defendants with respect to the claims of intentional infliction of emotional distress and defamation, but denied summary disposition of the claims of sex discrimination, wrongful discharge, tortious interference with contractual relations, and fraudulent conveyance. The defendants appealed by leave granted. The plaintiff cross appealed from the trial court’s refusal to enter a default judgment in her favor based upon the defendants’ alleged failure to cooperate with discovery. The Court of Appeals held: 1. The plaintiff has presented a prima facie case of sex discrimination and has sustained her burden of demonstrating that the defendants’ proffered legitimate, nondiscriminatory reason for their action was merely a pretext. There is a genuine issue of fact regarding whether the plaintiff was discriminated against on the basis of her gender. 2. The plaintiff should have been permitted to attempt to demonstrate to the jury that her demotion may have been a disparate form of discipline. There was a genuine issue of fact regarding whether the plaintiff was treated differently than other employees similarly situated. The trial court properly refused to grant summary disposition with regard to the claim of sex discrimination. References Am Jur 2d, Fraudulent Conveyances §§ 1, 3, 5-41, 145, 174; Job Discrimination §§151, 2003, 2006, 2008-2012, 2015-2020, 2022, 2024, 2735; Judgments §§ 1152, 1154, 1158; Master and Servant §§ 14-18, 20, 27, 32, 33; Wrongful Discharge §§ 95, 101-103, 120-122, 161-166. Right to discharge allegedly "at-will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 ALR4th 120. Liability of corporate director, officer, or employee for tortious interference with corporation’s contract with another. 72 ALR4th 492. 3. Under either a contractual analysis or a legitimate-expectations analysis, the plaintiff did not present sufficient evidence to create a genuine issue of fact concerning the existence of an employment contract terminable for just cause only. The trial court erred in failing to dismiss the wrongful discharge claim. 4. The trial court erred in denying summary disposition of the plaintiff’s claim of tortious interference with contractual relations against Armanda Herbert individually. The plaintiff presented no evidence of any affirmative acts by Armanda individually that corroborate an unlawful interference. 5. The trial court erred in denying summary disposition of the plaintiff’s claim that the defendants fraudulently conveyed certain property contrary to §§ 4, 5, and 6 of the Uniform Fraudulent Conveyance Act, MCL 566.14, 566.15, 566.16; MSA 26.884, 26,885, 26.886, but properly denied summary disposition of the claim involving § 7 of the act, MCL 566.17; MSA 26.887. The plaintiff presented sufficient evidence to create a question of fact regarding the defendants’ intent to defraud creditors under § 7 of the act. 6. The plaintiff was a creditor under the Uniform Fraudulent Conveyance Act and is entitled to pursue her claim under § 7 of the act. 7. Although the record confirms facts sufficient to warrant the entry of a default judgment based on the defendants’ failure to cooperate with discovery, the trial court’s refusal to enter a default judgment was not an abuse of discretion in light of the measures the court took to remedy the defendants’ abuse of the discovery process. 8. The trial court’s denial of summary disposition of the claims of wrongful discharge and tortious interference with contractual relations is reversed. The court’s denial of summary disposition of the claims of sex discrimination and fraudulent conveyance is affirmed. The trial court’s refusal to enter a default judgment based on the defendants’ failure to cooperate with discovery is affirmed. Affirmed in part and reversed in part. 1. Civil Rights — Sex Discrimination — Motions and Orders — Summary Disposition. A plaintiff must demonstrate a genuine issue of material fact regarding whether a prima facie case of sex discrimination exists to avoid summary disposition of such a claim; a prima facie case of discrimination can be made by proving either intentional discrimination or disparate treatment; where the defendant puts forth a legitimate, nondiscriminatory reason for its actions in response to a prima facie case of discrimination, the plaintiff has the burden of showing that the proffered reason is merely a pretext (MCR 2.116[C][10]). 2. Civil Rights — Sex Discrimination — Prima Facie Case. In order to establish a prima facie case of intentional sex discrimination in employment, a plaintiff must prove membership in a protected class, discharge or other discrimination with respect to employment, predisposition of the defendant to discriminate against persons in the class, and action by the defendant upon that disposition when the employment decision was made; to establish a prima facie case under the disparate-treatment theory, the plaintiff must show membership in a protected class and that, for the same conduct or performance, a person of the other gender was treated differently. 3. Master and Servant — Termination for Cause. An employment relationship terminable for just cause only can arise either by contract or by an employee’s legitimate expectations in reliance on company policies; a general statement concerning job security, without further discourse about causes for termination, is insufficient to establish an employer’s intent to create a just-cause contract. 4. Torts — Interference with At-Will Employment Contract. A plaintiff with a claim of tortious interference with an at-will employment contract against a defendant who is an officer of the employer must prove that the officer was acting outside the scope of the officer’s authority; such a claim requires proof, with specificity, of affirmative acts by the defendant that corroborate the unlawful purpose of the interference. 5. Fraudulent Conveyances — Uniform Fraudulent Conveyance Act — Intent to Defraud — Badges of Fraud. Actual intent to defraud creditors can be inferred under the Uniform Fraudulent Conveyance Act from certain "badges” of fraud, although the existence of such badges is not conclusive evidence of intent to defraud; badges of fraud include lack of consideration for the conveyance, a close relationship between transferor and transferee, pendency or threat of litigation, financial difficulties of the transferor, and retention of the possession, control, or benefit of the property by the transferor (MCL 566.17; MSA 26.887). 6. Fraudulent Conveyances — Uniform Fraudulent Conveyance Act — Creditor. A creditor, for purposes of the Uniform Fraudulent Conveyance Act, is a person having a claim, whether matured or unmatured, liquidated or unliquidated, absolute, fixed, or contingent; a person with a tort claim is a creditor from the date of the tort, any liabilities are considered as existing from the date the cause of action arose, and an action can be brought under the act before the rendering of a judgment in a preceding action involving the parties (MCL 566.11, 566.20; MSA 26.881, 26.890). 7. Pretrial Procedure — Discovery — Remedies — Default Judgments. The entry of a default judgment for failure to cooperate with discovery is an extraordinary remedy reserved for use within the sound discretion of the trial court (MCR 2.313[B][2][c]). Kelman, Loria, Downing, Schneider & Simpson (by Janet M. Tooley), for the plaintiff. Bell & Gardner, P.C. (by James W. McGinnis), for the defendants. Before: Gribbs, P.J., and Shepherd and P. E. Deegan, JJ. Circuit judge, sitting on the Court of Appeals by assignment. Shepherd, J. Defendants appeal by leave granted from a November 1, 1991, order of the trial court granting defendants partial summary disposition but denying summary disposition with regard to the balance of plaintiffs claims. Plaintiff cross appeals from the trial court’s refusal to grant entry of a default judgment based on defendants’ alleged failure to cooperate in discovery. We affirm in part and reverse in part. This case arises out of plaintiffs employment relationship with Tixon Corporation, of which William Herbert was general manager, and his wife, Armanda Herbert, was president. Tixon was in the business of collecting parking violation fines for the City of Detroit. Plaintiff began working for Tixon in September, 1986. After working as a supervisor for two years, plaintiff was promoted to the position of assistant operations manager. Plaintiff was primarily responsible for the operations support and the public service departments. Tixon’s other assistant manager was Derrick Gray. Gray was responsible for the revenue and data entry departments, and was later also given the title of marketing director. On May 9, 1990, defendant William Herbert issued a memorandum that announced the elimination of two positions—those of plaintiff and defendant William Herbert’s son, Steven Herbert, ostensibly for economic reasons. Plaintiff’s responsibilities were to be consolidated with those of Gray, who was to be given the sole assistant manager position. At the same time, plaintiff was offered an alternative position as a processor, with a reduction in pay. Plaintiff accepted the lower-level position, but resigned by June, 1990. Following her demotion, plaintiff filed suit against defendants. Then, on November 2, 1990, after her resignation, plaintiff filed an amended complaint. Plaintiff’s amended complaint alleged sex discrimination, wrongful discharge, intentional infliction of emotional distress, defamation, and fraudulent conveyance against all three defendants. Further, plaintiff’s amended complaint alleged interference with contractual relations against defendant Armanda Herbert individually. As noted above, on November 1, 1991, following a hearing on defendants’ motion for summary disposition pursuant to MCR 2.116(0(10), the trial court ordered partial summary disposition. The trial court granted defendants’ motion for summary disposition regarding plaintiff’s claims of intentional infliction of emotional distress and defamation, but denied summary disposition of plaintiff’s claims of sex discrimination, wrongful discharge, tortious interference with contractual relations, and fraudulent conveyance. From that November 1, 1991, order, defendants appeal by leave granted. Plaintiff cross appeals from the trial court’s refusal to enter a default judgment in her favor based upon defendants’ alleged failure to cooperate in discovery. On appeal, our review of a motion for summary disposition pursuant to MCR 2.116(C)(10) is de novo. Adkins v Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992). A motion for summary disposition under MCR 2.116(C)(10) tests the factual support for a claim. Buczkowski v Allstate Ins Co (On Rehearing), 198 Mich App 276, 278; 502 NW2d 343 (1993). The trial court must give the benefit of any reasonable doubt to the nonmoving party. Schultes v Naylor, 195 Mich App 640, 645; 491 NW2d 240 (1992). The trial court must then determine whether a record might be developed that would leave open an issue upon which reasonable minds might differ. Featherly v Teledyne Industries, Inc, 194 Mich App 352, 357; 486 NW2d 361 (1992). i First, defendants argue that the trial court should have granted summary disposition with regard to plaintiff’s claim of sex discrimination under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. Defendants argue that plaintiff was not similarly situated to the male employees to whom she compares herself. Defendants also argue that plaintiff has not demonstrated that the reasons given by defendants for eliminating plaintiffs position were a mere pretext. In order to avoid summary disposition of this claim, plaintiff had to demonstrate a genuine issue of material fact regarding whether a prima facie case of discrimination exists. Schultes, supra at 645; MCR 2.116(c)(10). A prima facie case of discrimination can be made by proving either intentional discrimination or disparate treatment. Reisman v Regents of Wayne State Univ, 188 Mich App 526, 538; 470 NW2d 678 (1991). In order to establish a prima facie case of intentional sex discrimination, a plaintiff must show that she was a member of a protected class, that she was discharged or otherwise discriminated against with respect to employment, that the defendant was predisposed to discriminate against persons in the class, and that the defendant acted upon that disposition when the employment decision was made. Schultes, supra at 646. In order to establish a prima facie case of sex discrimination under the disparate-treatment theory, a plaintiff must show that she was a member of a protected class, and that, for the same conduct or performance, she was treated differently than a man. Id. at 645. Where, in response to a prima facie case of discrimination, a defendant puts forth a legitimate, nondiscriminatory reason for its actions, the plaintiff has the burden of showing that the proffered reason was merely a pretext. Featherly, supra at 362. A In the present case, our review of the record reveals that there is a genuine issue of fact regarding whether plaintiff was discriminated against on the basis of her gender. MCR 2.116(0(10). There is no question that plaintiff is a member of a protected class, and that an employment decision was made that was adverse to her. Schultes, supra at 646. Further, it is undisputed that a male coworker, Gray, was paid significantly more as a new supervisor than plaintiff was paid for being an experienced supervisor. Although Gray was promoted to assistant manager a few months after plaintiff, Gray also earned more than plaintiff in the assistant manager position. Then, when the two assistant manager positions were consolidated, Gray was chosen over plaintiff despite plaintiffs greater experience. This was sufficient to create a prima facie case of sex discrimination. Reisman, supra at 538. While at this stage of the proceedings there may be some dispute regarding whether plaintiff and Gray were similarly situated, this is a factual question to be answered by a jury. It does appear that plaintiffs duties as an assistant manager were different from Gray’s. Plaintiff oversaw the public relations and operations support departments. Gray oversaw the revenue and data entry departments, and was later also given the title of marketing director when the assistant manager positions were consolidated. However, on the basis of the job descriptions and various other exhibits presented by the parties, we cannot say with certainty that the two assistant manager positions were substantially different. While plaintiff acknowledges that Gray had attained a higher level of education with his college degree, we cannot say that Gray’s college degree made him any more qualified for the consolidated assistant manager position because the position entailed responsibilities in a wide array of disciplines. By comparison, plaintiff was already proficient at supervising the public relations and operations support departments. Overall, plaintiff and Gray appear to have been equally qualified for the consolidated assistant manager position—although plaintiff had been with the company longer. Thus, we are left with a question of fact regarding why plaintiff was not chosen for the position despite her equal or superior qualifications. Schultes, supra at 645. Plaintiff has presented a prima facie case of sex discrimination. In response to plaintiff’s prima facie case of sex discrimination, defendants argue that plaintiff’s position was eliminated because of economic necessity. However, plaintiff has presented evidence that defendant Tixon Corporation operated at a substantial profit for the period in question. Thus, plaintiff has sustained her burden of demonstrating that defendants’ proffered reason was merely a pretext. Featherly, supra at 362. B On an independent basis, as discussed above, we would sustain plaintiff’s claim of sex discrimination in light of the disparate treatment she received in comparison to Gray. However, in a separate argument, plaintiff also alleges that other male employees were not proportionately disciplined for various incidents of misconduct, while she was constructively discharged for remarking that the Herberts spent their money in ways other than on their employees. On this point—with the elimination of a valid economic rationale for defendants’ actions, as noted above—plaintiff should also be permitted to attempt to demonstrate to a jury that her demotion may have been a disparate form of discipline. The evidence presented by plaintiff in support of this argument strongly suggests that a number of other male employees were not proportionately disciplined for far more egregious conduct. For example, some male employees received neither a demotion nor a pay cut for such serious infractions as fighting on the job and falsifying timesheets. Thus, here also there is a genuine issue of fact. MCR 2.116(0(10). In sum, there exists a genuine issue of material fact whether plaintiff was treated differently than other employees similarly situated. It appears that the record may be further developed in support of plaintiff’s claim of sex discrimination. Featherly, supra at 357. The trial court properly refused to grant summary disposition with regard to this count. ii Next, defendants argue that the trial court erred in refusing to grant summary disposition of plaintiff’s claim of wrongful discharge. Defendants argue that plaintiff was not discharged, but rather resigned. Further, defendants argue that even if plaintiff was constructively discharged, she cannot prove the existence of an employment contract providing for termination only for just cause. Here, we agree that there is no genuine issue of material fact that plaintiff’s employment was terminable only for just cause. MCR 2.116(0(10). No reasonable juror could find that plaintiff had a just-cause employment contract. Featherly, supra at 357. In the recent case of Rood v General Dynamics Corp, 444 Mich 107, 119, 140; 507 NW2d 591 (1993), our Supreme Court reiterated that a just-cause employment relationship can arise either by contract or by an employee’s legitimate expectations in reliance on company policies. However, there is a strong presumption that employment contracts for an indefinite duration are terminable at the will of either party for any reason or for no reason at all. Id. at 116. Under a contractual theory, courts use an objective test, looking at the expressed words of the parties and their visible acts to determine whether a reasonable person could have interpreted the words or conduct to create such a contract. Id. at 119. Under the legitimate-expectations theory, the courts must "examine employer policy statements, concerning employee discharge, if any, to determine, as a threshold matter, whether such policies are reasonably capable of being interpreted as promises of just-cause employment.” Id. at 140. In support of her claim of a just-cause employment relationship, plaintiff stated during her deposition that William Herbert told her that she would keep her job as long as Tixon was doing business. In addition, plaintiff emphasizes that she was given a management training
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