United States District Court, N.D. Indiana, Hammond Division
OPINION AND ORDER
ANDREW P. RODOVICH, Magistrate Judge.
This matter is before the court on the Motion for Summary Judgment [DE 151] filed by the defendants, MBIP, LLC, Tower Road, LLC, CRCFR Properties, LLC, and Joliet Road Properties, LLC, on December 16, 2013; the Motion for Summary Judgment [DE 153] filed by the defendants Marie Marshall, Trustee of the Glen E. Marshall Marital Trust, and Karen Marshall, Beneficiary of the Glen E. Marshall Marital Trust, on December 16, 2013; the Motion for Summary Judgment [DE 155] filed by the defendants G.E. Marshall, Inc. and M5, Inc. on December 16, 2013; the Motion for Partial Summary Judgment [DE 157] filed by the plaintiff, Casa Marshall, on December 16, 2013; the Motion for Summary Judgment [DE 165] filed by the defendants, Clinton E. Marshall, Frank A. Marshall, Roger W. Marshall, and Ross J. Marshall (the Marshall Brothers) on December 16, 2013; the Motion to Seal [DE 168] filed by Casa on December 16, 2013; the Motion for Hearing on the Motion for Summary Judgment [DE 170] filed by the defendants on December 16, 2013; the Objection and Motion to Strike Portions of Casa Marshall's Motion for Partial Summary Judgment [DE 172] filed by the Marshall Brothers on February 12, 2014; the Motion for Hearing on Casa Marshall's Motion for Summary Judgment [DE 181] filed by Casa on February 12, 2014; and the Motion for Leave to File Sealed Documents [DE 182] filed by Casa on February 12, 2014.
Based on the following reasons, the Motion for Summary Judgment [DE 151] filed by MBIP, Tower Road, CRCFR Properties, and Joliet Road Properties is GRANTED; the Motion for Summary Judgment [DE 153] filed by Marie and Karen Marshall is GRANTED; the Motion for Summary Judgment [DE 155] filed by G.E. Marshall and M5 is GRANTED; the Motion for Partial Summary Judgment [DE 157] filed by Casa Marshall is DENIED; the Motion for Summary Judgment [DE 165] filed by the Marshall Brothers is GRANTED; the Motion to Seal [DE 168] filed by Casa is GRANTED; the Motion for Hearing on the Motion for Summary Judgment [DE 170] filed by the defendants is DENIED; the Objection and Motion to Strike Portions of Casa Marshall's Motion for Partial Summary Judgment [DE 172] filed by the Marshall Brothers is DENIED AS MOOT; the Motion for Hearing on Casa Marshall's Motion for Summary Judgment [DE 181] is DENIED; and the Motion for Leave to File Sealed Documents [DE 182] filed by Casa is GRANTED.
Glen E. Marshall, Inc. (GEMI) is a family-owned closely held corporation that provides sitework, excavating, and demolition services. Glen E. Marshall was GEMI's President and had sole power to make management decisions until he became ill and died in 2003. After Glen's death, his wife, Karen Marshall, became the beneficiary of the Glen E. Marshall Marital Trust, which held the majority of the GEMI stock. Marie Marshall, Glen's sister-in-law, became the trustee. The trust included a right to withdraw, which stated: "my wife may withdraw any part or all of the principal at any time or times. The trustee shall make payment without question upon her written request. The right to withdraw shall be a privilege that may be exercised only voluntarily and shall not include an involuntary exercise." (Marie Aff. Ex. A)
Glen E. Marshall also bequeathed 3% of the stock to each of his children, Casa and the Marshall Brothers. Their interest increased to 5.66% in 2006. Casa and the Marshall Brothers voted both on their shares and the Marital Trust shares equally and served as the directors of the company.
Prior to her father's death, Casa was a truck driver at GEMI until the 1980s. She then performed secretarial work. Her duties included filing, paying bills, running payroll, preparing proposals, and signing contracts for small purchases. Following her father's death, Casa became the Office Manager and assumed responsibilities as Human Resources Director. In this role, Casa was responsible for hiring and training office staff and administering employee benefits. Specifically, she was in charge of drug-testing truck drivers, video-taping roads where services would be performed, maintaining employee records, obtaining licenses to conduct business, ensuring that truck drivers were licensed, making out charts or calendars for the yearly work, and preparing the Department of Transportation audits. GEMI also sent Casa to seminars that covered various topics, including the Family and Medical Leave Act and the Americans with Disabilities Act. Casa did not implement any of the FMLA or ADA procedures. Casa was a salaried employee during March 2007, and received the same annual salary and bonuses as the Marshall Brothers. GEMI approved all of Casa's raises.
Ross Marshall was hired at GEMI 3-4 years after Casa began working. Clinton began a few years after that, Frank 4 years after Clinton, and Roger started 2-3 years after Frank. The Marshall Brothers began as operating engineers running heavy equipment. The Marshall Brothers later became and are now responsible for all aspects of revenue generation and management of GEMI, including finding new clients, maintaining client relationships, conducting site development, directing work crews, visiting and overseeing job sites, supervising machine shop and equipment maintenance, purchasing equipment, hiring and firing personnel, working with estimators, developing and submitting bids, attending bid meetings, reviewing contracts, and management all corporate activities.
Following their father's death, Casa and the Marshall Brothers served as the officers and directors of GEMI. They held weekly board meetings at which they made major company decisions about large equipment and real estate purchases, projects to bid, projects to lien, personnel decisions, and issuing dividends. Corporate dividends only were paid to owners, not employees.
Casa was elected as GEMI's Vice President and served in this capacity until December 2007. As a director, Casa and her brothers each had an equal vote on management decisions and had the authority to sign contracts and issue checks on behalf of the company. Casa often was out-voted by her brothers 4-1. However, on one occasion, Casa over-rode the vote not to hire an individual.
Casa became ill and went to the Mayo Clinic in Minnesota for treatment. She was scheduled for brain surgery in July 2007. Casa informed the Marshall Brothers that she needed medical leave a week or two before her surgery. Because GEMI did not have FMLA paperwork for its employees, Casa stated that the customary practice was for employees requesting medical leave to notify GEMI. Casa was off work during July and August 2007. Casa needed three weeks leave for hospitalization related to her surgery and an additional six weeks for recuperation. She was prescribed medications and received physical therapy in Minnesota following her surgery. Her physical therapy continued when she returned to Valparaiso, Indiana. Her daughter, Jennifer Gudenschwager, assisted her during her recovery period.
On July 23, 2007, GEMI and the Marshall Brothers demanded a written release from Casa's doctor for her to return to work. The letter stated:
The company wishes to be assured that it is in your best interest to return to work, and requests that you provide a written release or notification from your attending physician stating that your return to work is permitted by your physician, and stating any condition or limitation to your return, if any.
At the time Frank sent the letter, he already had taken steps to terminate Casa. On July 27, 2007, Casa's physician faxed a note to GEMI stating that Casa should be excused from work July 6, 2007 through August 13, 2007. Before GEMI received the doctor's note and knew Casa was not released to return to work, Frank told Casa that she must return to work or she would be fired. Casa did not return to work until September 4, 2007, and received paid medical leave through this date. Upon her return, Casa did not need help performing her duties, but she did purchase a signature stamp so she could sign GEMI checks because her signature "looked funny." (Casa Dep. p. 171) The Marshall Brothers did not approve her purchase of the stamp.
On July 23, 2007, the Marshall Brothers also issued Casa a warning, alleging that she had misappropriated corporate funds. The Marshall Brothers complain that Casa wrote corporate checks to her daughter, Jennifer, dated June 26, 2007 and July 3, 2007. Casa does not recall issuing checks to her daughter during June 2007. Jennifer testified that she does not recall doing work on GEMI property but that she did recall helping her mother while she was at Mayo Clinic and recuperating at home. Casa did not authorize anyone at GEMI to hire Jennifer, but Casa testified that she "possibly" hired her.
During August 2007, while Casa was on FMLA leave, Frank had a GEMI employee write an attendance policy for GEMI. The policy concerning attendance stated that "[t]ardiness, absenteeism, or failure to report for work is unacceptable." (Pl.'s Dep. Ex. 1, p. 110-111) On August 13, 2007, GEMI received a letter from Casa's doctor that she was to remain off work until September 4, 2007 because of her ongoing recovery and rehabilitation. Casa returned to work on September 4, 2007, and resumed her job duties as Office Manager and Human Resources Director. When she returned, she learned that her check signing capability had been taken away. She also was provided with a copy of GEMI's new policies.
Because earth moving jobs frequently are done in the spring, summer, and fall, Casa and the Marshall Brothers made it a practice to take vacations during the winter and to draw their regular salaries while business was slow. During the winter of 2007-2008, Casa decided not to take her regular salary and instead worked on an hourly basis, reducing the amount of money GEMI had to pay her. During this time, Casa opened a gift shop.
Casa first expressed interest in selling her shares of GEMI and M5 in 2003. On October 10, 2007, Frank sent Casa a buyout offer to purchase Casa's shares for $750, 000. The offer contemplated closing the transaction by December 31, 2007, required Casa to resign from her employment at GEMI and M5, Inc., and demanded that she forego any future interests in her mother's estate. GEMI had its monthly board meeting on December 4, 2007. At the meeting, the Marshall Brothers discussed the buyout previously offered to Casa. After Casa left the board meeting, she was removed as a member of the Board of Directors. After December 2007, the Marshall Brothers continued in their role as GEMI's officers and directors. The Marshall Brothers received the same salary based on the principle of "equality." All management decisions continued to be made by a majority vote of Casa and her four brothers.
The Marshall Brothers allege that Casa had a history of not performing her work at GEMI since 2003, but did not issue her a warning about her performance until 2007. The Marshall Brothers explain that in addition to misappropriating corporate funds, Casa did not create employee policies for the company. During the Fall of 2007, Casa came into her brother's office with the Human Resources and Department of Transportation materials and threw them on a desk, announcing that "I'm not doing this shit anymore; you're going to have to do it." (Clinton Dep. p. 96-97) Another employee completed the Department of Transportation audit. Roger testified that the Marshall Brothers had discussed reducing Casa's salary amongst themselves, but did not do so. Roger stated that the Marshall Brothers first contemplated terminating Casa in early to mid-summer 2007, and were leaning toward terminating her.
On November 30, 2007, GEMI issued Casa a memorandum addressing her job performance. The memorandum stated that Casa did "not report to work during normal work hours, [did] not work the required number of hours per week, and [did] not complete or accomplish the work duties required of [her] position." (Casa Dep. p. 96, Ex. 4) The memorandum further stated that Casa's job performance was "very, very poor" and progressively had gotten worse. The company's efforts to discuss Casa's performance with her had "generally been always met with defensive and vulgar language." (Casa Dep. Ex. 4) The Marshall Brothers stated that Casa was at the office less frequently after they sent the buy-out letter and that she began forwarding human resource issues to Roberta Marshall, GEMI's Executive ...