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Depaula v. Mirador

United States Court of Appeals, Tenth Circuit

June 12, 2017

JOHN DEPAULA, Plaintiff - Appellant,
EASTER SEALS EL MIRADOR, a corporation, Defendant-Appellee.


          M. Karen Kilgore, Cuddy & McCarthy, LLC, Santa Fe, New Mexico, appearing for Appellant.

          Luke A. Salganek (Paula G. Maynes, with him on the brief), Miller Stratvert, P.A., Santa Fe, New Mexico, appearing for Appellee.

          Before MATHESON, PHILLIPS, and McHUGH, Circuit Judges.

          MATHESON, Circuit Judge.

         Plaintiff-Appellant John DePaula appeals from the district court's order granting summary judgment in favor of his employer, Defendant-Appellee Easter Seals El Mirador ("ESEM"), on Mr. DePaula's various employment discrimination claims arising from his termination. ESEM showed that it fired Mr. DePaula due to its financial condition and his performance issues. Mr. DePaula could not rebut these reasons or otherwise show they were pretextual. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

         I. BACKGROUND

         A. Factual History

         We present the following facts in the light most favorable to Mr. DePaula, the non-movant, unless contradicted by the record. Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1251 (10th Cir. 2015).[1]

         ESEM is a nonprofit New Mexico corporation that provides services and facilities for developmentally disabled adults. Mr. DePaula worked at ESEM for 22 years, from August 1990 until June 2012. In 1994, he was promoted to Deputy Director of Programs and/or Clinical Services and oversaw several aspects of ESEM's operation. For 21 of his 22 years with ESEM, Mark Johnson, ESEM's CEO, was Mr. DePaula's direct supervisor.

         1. Supervision by Mr. Johnson

         Between 2009 and 2010, Mr. DePaula received several memoranda from Mr. Johnson that documented and summarized conversations between them about Mr. DePaula's performance.[2]

         Each memorandum expressed Mr. Johnson's disapproval of Mr. DePaula's performance, leadership, and treatment of particular employees. The memoranda noted persistent problems "that apparently have been f[e]stering for a long period of time" and that required Mr. Johnson to "continually intervene to solve day to day programmatic operational issues."[3] App. at 604-05. They also provided specific performance suggestions and expressed disapproval that Mr. DePaula had not implemented them. For example:

[T]hese are some specific examples of how I need you to take a stronger, more organized leadership role. I cannot continue to have resolutions to issues be delayed, as it seems to have been becoming a pattern with your approach to problem solving.

Id. at 609. Mr. Johnson repeatedly told Mr. DePaula these changes were essential to Mr. DePaula's success at ESEM.[4]

         2. Pay Raises and Deduction

         Mr. DePaula received a "onetime bonus of $4, 000" in June 2009 and a "onetime leave payout for non[-]used accrued leave in the amount of $2, 100" in September 2009. Id. at 762. He also received a $12, 000 "wage increase" in June 2010, made retroactive to July 2009. Id. at 763.

         In March 2012, ESEM deducted $8, 000 from Mr. DePaula's pay to compensate for a Civil Monetary Penalty ("CMP") incurred by ESEM in November 2011 due to Mr. DePaula's failure to submit a timely report to the Department of Health ("DOH"). Mr. DePaula took "ultimate responsibility for the late filing." Id. at 757.

         3. ESEM's Financial Difficulties and Hiring Ms. Romero

         In 2012, ESEM was experiencing financial difficulties, including "cash flow" problems due at least in part to late incoming checks and reimbursements. Id. at 817. In response, ESEM focused on operations, cutbacks, and "positions having to be left empty." Id.

         In January 2012, the non-profit Foundation of Knights Templar ("FOKT") contributed $150, 000 to ESEM. FOKT's mission includes supporting ESEM, which it may do through financial contributions-though it is not "obligated or required" to do so. Id. at 307.

         Also in January 2012, Mr. Johnson hired Patsy Romero as ESEM's Chief Operating Officer. She was charged with implementing cost containment measures.

         At an April 19, 2012 meeting, Mr. Johnson assured senior management that ESEM was in a better financial position "than other providers who are now taking a $2 million loss." Id. at 818. But he also stated ESEM was "breaking even, " the next year would be a "rebase year, " and ESEM would have to "find a way to spend creatively, to get rates up, perhaps by spending in the latter part of the fiscal year." Id.

         4. Relationship with Mr. Quintana

         In 2011, ESEM employee Ken Quintana became Incident Manager, a position responsible for providing investigation reports to the DOH. Until December 2011, Mr. DePaula supervised Mr. Quintana. During Mr. DePaula's supervision, Mr. Quintana was diagnosed with cancer.

         When Ms. Romero was hired in January 2012, she began supervising Mr. DePaula and Mr. Quintana. Mr. Quintana claimed Ms. Romero treated him badly as a response to the leave he needed to care for his cancer. He emailed Mr. DePaula "at least five emails . . . complaining about" Ms. Romero's interactions with him. Id. at 756; id. at 777-84. Mr. DePaula attested that he "talked to" Mr. Johnson and ESEM's Human Resources ("HR") department about Mr. Quintana's complaints, "tr[ying] to protect" him. Id. at 756. Mr. DePaula also helped Mr. Quintana with his reports to mitigate Ms. Romero's disapproval of Mr. Quintana's work product. Once Ms. Romero learned of this assistance in December 2011, she instructed Mr. DePaula to stop.

         5. Mr. DePaula Changes Positions

         A third party monitoring company evaluated ESEM and advised that Mr. DePaula did not have the clinical credentials to continue as the Deputy Director of Clinical Services. In response, in March 2012, Ms. Romero moved Mr. DePaula into the position of Risk Manager/Incident Manager/Director of Risk Management. His salary was not decreased.

         6. Mr. DePaula Takes FMLA Leave

         Shortly thereafter, on March 19, 2012, Mr. DePaula requested 12 weeks of leave under the Family and Medical Leave Act ("FMLA") to care for his mother, who had been diagnosed with dementia. ESEM granted Mr. DePaula's request, and the leave began on March 30, 2012.

         ESEM and Mr. DePaula had different understandings about when Mr. DePaula's FMLA leave would end. Mr. DePaula believed his leave would end on June 29, 2012, [5]but ESEM thought it would end on June 22, 2012-12 weeks from March 30, 2012. This discrepancy does not affect our analysis.

         7. Mr. DePaula's Termination

         In mid-May 2012, Ms. Romero "decided to eliminate" Mr. DePaula's Risk Manager/Incident Manager/Director of Risk Management position. Id. at 671. She interviewed candidates for "at least" the Incident Manager part of his job. Aplt. Br. at 5.[6]ESEM hired a new candidate by the time of its senior management meeting on June 21, 2012. The meeting minutes announced several organizational and structural changes, including the elimination of the Incident Manager and Risk Management positions.[7] The minutes also stated Ms. Jennifer Wadley "is being hired to cover Incident Management." App. at 822. Ms. Wadley was then 36 years old.

         On June 25, 2012, Ms. Romero notified Mr. DePaula that his employment at ESEM had been terminated. The termination letter explained that his position had been eliminated for budgetary reasons.[8] The letter outlined ESEM's efforts to move Mr. DePaula to the Director of Clinical Services and Risk Manager positions, but stated that "ESEM can no longer afford to create positions for employees that are not needed or critical to the delivery of services to our clients and program management." Id. at 651.

         The letter also referenced Mr. Johnson's dissatisfaction with Mr. DePaula's performance:

I must observe, however, that over the past four years of ESEM's exchanges and interactions with its licensing authority, the Department of Health, ESEM received notice that your continued management as Deputy Director, later as the Manager of Behavioral Health, was unacceptable because of program errors and lack of program oversight and compliance which occurred under your watch.


         B. Procedural History

         Mr. DePaula's amended complaint, the operative one here, alleged 14 claims against ESEM.[10] The district court granted summary judgment to ESEM on all 14. Mr. DePaula appeals only eight of those claims. Aplt. Br. at 23.

         1. Mr. DePaula's Complaint and ESEM's Motion for Summary Judgment

         Mr. DePaula's amended complaint alleged the following 14 federal and state claims-all concerning his termination:

. Count 1: Gender Discrimination under the New Mexico Human Rights Act ("NMHRA");
. Count 2: Gender Discrimination under Title VII of the Civil Rights Act of 1964;
. Count 3: Age Discrimination under the NMHRA;
. Count 4: Age Discrimination under the Age Discrimination in Employment Act of 1967 ("ADEA");
. Count 5: Discrimination Based on Association with a Person with a Disability/Serious Medical Condition ("association discrimination") under the NMHRA;
. Count 6: Association Discrimination under the Americans with Disabilities Act of 1990 ("ADA");
. Count 7: Retaliation under the NMHRA;
. Count 8: "Wrongful/Retaliatory Discharge" under New Mexico law;
. Count 9: Breach of Covenant of Good Faith and Fair Dealing under New Mexico law;
. Count 10: Negligent Retention and Supervision under New Mexico law;
. Count 11: Intentional Interference with Business Relations under New Mexico law;
. Count 12: "Prima Facie Tort" (as an alternative charge) under New Mexico law;
. Count 13 (two claims):

         a. Retaliation for taking leave under the Family Medical Leave Act ("FMLA") ("FMLA retaliation"); and b. Interference with exercise of FMLA rights ("FMLA interference").

         2. ESEM's Motion for Summary Judgment and District Court Order

         ESEM filed a motion for summary judgment on July 2, 2015. The district court granted the motion on all 14 of Mr. DePaula's claims as follows:[11]

. Counts 1 and 2-Gender Discrimination claims under the NMHRA and Title VII: Mr. DePaula failed to establish a prima facie showing that ESEM had discriminated against men because the evidence presented did not "support the suspicion that [ESEM was] that unusual employer who discrimate[d] against the majority." Op. at 5.
. Counts 3 and 4-Age Discrimination under the NMHRA and ADEA: ESEM had provided two legitimate, nondiscriminatory reasons for Mr. DePaula's termination: (1) ESEM's financial difficulties, and (2) Mr. Johnson's dissatisfaction with Mr. DePaula's performance. Mr. DePaula failed to demonstrate ESEM's proffered justifications were pretextual.
. Counts 5 and 6-Association Discrimination under the NMHRA and ADA: Mr. DePaula failed to establish a prima facie case because he did not show he was terminated due to his association with his mother and Mr. Quintana. The district court noted that even assuming he could establish a prima facie case, ESEM provided legitimate reasons for Mr. DePaula's termination and Mr. DePaula failed to show those reasons were pretextual.
. Count 7-Retaliation under the NMHRA: First, Mr. DePaula failed to establish a prima facie case of retaliation for reporting discrimination, retaliation, harassment, and a hostile work environment because there was no evidence he complained of Mr. Quintana's treatment to ESEM. Second, he failed to establish a prima facie case of retaliation for helping Mr. Quintana because the temporal proximity between his help and his termination was insufficient to establish retaliation. Third, Mr. DePaula's claim for retaliation for requesting and taking FMLA leave failed consistent with his FMLA retaliation claim in Count 13. The district court's conclusions were "further supported" by ESEM's production of legitimate reasons for Mr. DePaula's termination and Mr. DePaula's failure to show those reasons were pretextual. Op. at 21.
. Count 8-Wrongful/Retaliatory Discharge: Because Mr. DePaula's wrongful/retaliatory discharge claim was premised on the same theory as his FMLA interference and retaliation claims in Count 13, he could seek redress for the wrong under the FMLA.[12] He was thus precluded from raising a separate wrongful/retaliatory discharge claim for the same theory.
. Count 9-Breach of Covenant of Good Faith and Fair Dealing: This cause of action is not available to at-will employees, like Mr. DePaula.
. Count 10-Negligent Retention and Supervision: Mr. DePaula failed to show that ESEM's hiring or supervision of Ms. Romero created an unreasonable risk of injury to him, or other ESEM employees, or that ESEM failed to ...

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