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Stocker v. Extendicare Health Services, Inc.

United States District Court, N.D. Indiana

January 10, 2017




         This matter is before the Court on the Defendant's Motion to Dismiss Plaintiff's Amended Complaint [ECF No. 16], filed on October 10, 2016. In response to this Court's Opinion and Order [ECF No. 12] of August 8, 2016, Plaintiff Becky Stocker amended her complaint against the Defendant, Extendicare Health Services, Inc.[1] The Defendant then moved to dismiss the Amended Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), asserting that it fails to state any claim upon which relief may be granted. On November 10, 2016, the Plaintiff filed her Response [ECF No. 22]. On November 21, 2016, the Defendant filed its Reply [ECF No. 11]. With this matter now being fully briefed, the Defendant's motion is granted.


         The factual allegations underlying the Amended Complaint are familiar to the Court. “[The Plaintiff] was actively recruited and hired by Extendicare to become the Nursing Home Administrator for the Ironwood Health and Rehabilitation Center, located in South Bend, Indiana.” (Am. Compl. ¶ 3, ECF No. 16.) The final employment agreement reached between the two parties “called for [the Plaintiff] to receive an annual salary of one-hundred and fifty thousand dollars . . . and a bonus of fifty thousand dollars . . . to be received at the end of her initial retention period of thirty-six months in her position as Nursing Home Administrator.” (Id. ¶ 7.) After reaching this agreement, the Plaintiff relocated to South Bend from Tennessee, where she had also worked as a nursing home administrator. The Plaintiff began working at the Ironwood Health and Rehabilitation Center on October 17, 2012. (Id. ¶ 10.)

         In 2013, “[the Plaintiff] was asked to cooperate with an ongoing investigation being conducted into Ironwood by the United States Drug Enforcement Administration (“DEA”) and the Office of the Indiana Attorney General . . . concerning activities that pre-dated [the Plaintiff's] employment, regarding alleged forged prescriptions and patient care issues.” (Id. ¶ 12.) The Plaintiff agreed to cooperate with the investigation and discovered violations of safety protocols, health codes, patient care, privacy issues and mismanagement of employees and staff. Some of the violations the Plaintiff observed were “so extreme that they could be classified as illegal activity.” (Id. ¶ 16.) Without notifying the investigators or reporting the violations, the Plaintiff allegedly would have been “criminally and civilly liable” for violation of “some or all of” the following federal laws: the Controlled Substances Act, Title XI of the Social Security Act, the False Claims Act, and HIPAA. (Id. ¶ 17.)

         The Plaintiff tried to bring the facility into compliance with the law after discovering the violations. As the Plaintiff attempted to remedy the violations in her workplace, she was “subject to threatening and harassing behavior by [the Defendant's] employees and management.” (Id. ¶ 19.) In January 2014, the Plaintiff emailed several members of the Human Resources Department about the harassment she experienced, but she received no assistance. Finally, on January 24, 2014, the Plaintiff emailed Tim Lukenda, the President of Extendicare, “documenting the ongoing retaliation and harassment she was incurring and the noncompliance/illegal conduct she had discovered at the facility.” (Id. ¶ 24.) She was terminated from her position two hours after she sent the email. The Plaintiff's Amended Complaint alleges a single count: that she was “terminated” and harassed . . . in retaliation for reporting illegal conduct being conducted in the facility and for her cooperation in the ongoing investigation into the facility.” (Id. ¶¶ 26-27.)


         When reviewing a complaint attacked by a Rule 12(b)(6) motion, a court must accept all of the factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Erickson v. Pardus, 551 U.S. 89, 93 (2007). The complaint need not contain detailed facts, but surviving a Rule 12(b)(6) motion “requires more than labels and conclusions . . . . Factual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).


         The Court has subject-matter jurisdiction over this case premised upon 28 U.S.C. § 1332 because the amount in controversy exceeds $75, 000 and the citizenship of the parties is diverse-the Plaintiff is a citizen of Indiana and the Defendant is a Wisconsin company doing business in Indiana.[2] As such, the Court “must apply the law of the state as it believes the highest court of the state would apply it if the issues were presently before that tribunal.” State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir. 2001). “When the state Supreme Court has not decided the issue, the rulings of the state intermediate appellate courts must be accorded great weight, unless there are persuasive indications that the state's highest court would decide the case differently.” Id.

         In her Amended Complaint, the Plaintiff claims that she was “terminated in retaliation for reporting illegal conduct in the facility and for her cooperation in the ongoing investigation into the facility by the DEA and [the Indiana Attorney General].” (Compl. ¶ 25.) Accordingly, she argues that this is an example of retaliatory discharge actionable under the principles established by Frampton v. Central Indiana Gas Co., 297 N.E.2d 425 (Ind. 1978). As an initial matter, a Frampton claim for retaliation only applies to employees at will. Frampton, 297 N.E.2d at 428.

[B]y the terms of a contract, whether it be written or verbal, where the contract is one for employment, and by its terms, the tenure of service cannot be determined, such contract is one at will, and may be terminated at any time, at the election of either party.

Campbell v. Eli Lilly & Co., 413 N.E.2d 1054, 1060 (Ind.Ct.App. 1980) (quoting Speeder Cycle Co. v. Teeter, 48 N.E. 595, 596 (Ind. 1897)). The Plaintiff's allegations in the Amended Complaint show that she was an at will employee. The 36 months upon which the Defendant relies to argue that she was a term employee was not a contractual obligation, but rather the amount of time necessary for the Plaintiff to receive her contingent bonus.[3]

         Employment at will is terminable at any time for “good reason, bad reason, or no reason at all.” Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016) (quoting Meyers v. Meyers, 861 N.E.2d 704, 706 (Ind. 2007)). However, Indiana courts have recognized three exceptions to the at-will doctrine. Ogden v. Robertson, 962 N.E.2d 134, 145 (Ind.Ct.App. 2012) (explaining exceptions exist when adequate independent consideration supports a contract, when a clear statutory expression of a right or duty is contravened, or ...

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