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Hart v. Farmers Insurance Exchange

United States District Court, E.D. Arkansas, Western Division

April 9, 2015

CHARLES G. HART, Plaintiff,
v.
FARMERS INSURANCE EXCHANGE, TRUCK INSURANCE EXCHANGE, FIRE INSURANCE EXCHANGE, MID-CENTURY INSURANCE COMPANY, FARMERS NEW WORLD LIFE INSURANCE COMPANY, INC., PATRICIA GAYLE GRAVES, and ROD JOHNSON, Defendants.

OPINION AND ORDER

SUSAN WEBBER WRIGHT, District Judge.

Plaintiff Charles G. Hart ("Hart") brings this race discrimination action pursuant to 42 U.S.C. § 1981 and the Arkansas Civil Rights Act, Ark. Code Ann. §16-123-101 et seq. ("ACRA"). He also brings a state law claim of tortious interference with a business expectancy. The defendants are Farmers Insurance Exchange, Truck Insurance Exchange, Fire Insurance Exchange, Mid-Century Insurance Company, Farmers New World Life Insurance Company, Farmers Insurance Company, Inc. (collectively "Farmers"), Patricia Gayle Graves, and Rod Johnson. Before the Court is defendants' motion for summary judgment, Hart's response, and defendants' reply. After careful consideration, and for the reasons that follow, defendants' motion is granted in part and denied in part. Hart's race discrimination claim is dismissed with prejudice, and Hart's supplemental claim is dismissed without prejudice.

Background[1]

Hart was an independent contractor agent appointed by Farmers to sell Farmers insurance policies. He became a Farmers agent in 2001. The Agent Appointment Agreement ("Agreement") Hart signed provides, in part, that he has an obligation to "furnish insurance services to all policyholders of the Companies... in such a manner as to advance the interests of the policyholders, the Agent and the Companies." The Agreement permits termination by either party upon thirty days written notice in the event of a breach by the other party. It also permits either the agent or Farmers to terminate the Agreement upon three months notice for any reason.

Separate Defendant Gayle Graves is an independent contractor Farmers District Manager located in Little Rock, Arkansas. Hart's Farmers agency was assigned to Graves's Farmers district. On July 18, 2013, Graves returned a telephone call from a Farmers customer, "Ms. R." Ms. R told Graves that Hart raped her in his Farmers agency office. According to Graves, Ms. R told her that she reported the rape to law enforcement and gave Graves a police report number. Hart knows Ms. R's full name.

Graves says that within minutes of her conversation with Ms. R, she called Separate Defendant Rod Johnson, the Agency Development Manager, to tell him of the allegations. Johnson obtained a copy of the police report which identified the offense as rape and lists Hart as the suspect. On July 22, 2013, Graves and Johnson met with Hart to discuss the allegations. At that time, Hart denied raping Ms. R. According to Johnson's notes from the July 22 meeting, Hart admitted to having sex with Ms. R in his office. On July 24, 2013, Johnson sent an email to Paul Crosetti, who was the Head of Farmers Mid-Central Territory, and to Keith Gockel, a consultant in Farmers Home Office Agencies, requesting authority to terminate Hart's agency. Johnson attached to the email his notes from the meeting with Hart and a summary of what Hart said during the meeting. Johnson described Hart's actions as "unacceptable and not normal good business practices." Crosetti gave Johnson permission to terminate Hart's agency. By letter dated August 2, 2013, Farmers notified Hart that it was terminating the Agreement upon three months written notice.

In addition to claiming his termination was racially motivated, Hart alleges defendants discriminated against him in 2011 in the re-assignment of policies. When Farmers terminated Allen Kerr, an independent contractor Farmers agent, it re-assigned Kerr's policies to other Farmers agents. Graves was responsible for proposing policy re-assignments for the majority of the policies assigned to Kerr's agency. Johnson had to approve each proposed re-assignment. Hart complains Graves assigned him only three of Kerr's policies while the rest went to white agents. He says one white agent received 224 of Kerr's policies and another white agent received 427. Hart claims race was a factor in the decision on re-distribution of the policies.

Standard of Review

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). As a prerequisite to summary judgment, a moving party must demonstrate "an absence of evidence to support the non-moving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Once the moving party has properly supported its motion for summary judgment, the non-moving party must "do more than simply show there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

The non-moving party may not rest on mere allegations or denials of his pleading but must "come forward with specific facts showing a genuine issue for trial.'" Id at 587 (quoting Fed.R.Civ.P. 56(e)). "[A] genuine issue of material fact exists if: (1) there is a dispute of fact; (2) the disputed fact is material to the outcome of the case; and (3) the dispute is genuine, that is, a reasonable jury could return a verdict for either party." RBSI Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 401 (8th Cir. 1995).

Discussion

Discrimination claims brought under 42 U.S.C. §1981 and the ACRA are analyzed in the same manner as claims under Title VII. See Anderson v. Durham D & M, LLC, 606 F.3d 513, 520-521 (8th Cir. 2010)(Title VII and § 1981 analyzed the same); Evance v. Trumann Health Services, LLC, 719 F.3d 673, 677 (8th Cir. 2013)(disparate treatment claims under Title VII and the ACRA analyzed in the same manner). To survive an employer's motion for summary judgment, an employee may produce direct evidence of discrimination. "If the employee lacks direct evidence of discrimination, he can survive summary judgment by showing a genuine dispute for trial under the burden-shifting framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)." McCullough v. Univ. of Arkansas for Med, Sciences, 559 F.3d 855, 860 (8th Cir. 2009).

Because there is no direct evidence of discrimination, the Court proceeds to the McDonnell Douglas analysis, under which Hart first must establish a prima facie case of discrimination. In order to do that, Hart must show that he: (1) is a member of a protected group; (2) was meeting the legitimate expectations for his position; (3) suffered an adverse action; and (4) the circumstances give rise to an inference of discrimination. See Davis v. Jefferson Hosp. Ass'n, 685 F.3d 675, 680-81 (8th Cir. 2012). If Hart can establish a prima facie case, then the burden of production shifts to Farmers to articulate a legitimate, nondiscriminatory reason for its actions. If Farmers meets this burden, then Hart must show that Farmers's proffered reason for its actions is a pretext for unlawful discrimination. McCullough, 559 F.3d at 860.

Assuming Hart has established the first three elements of his prima facie case, the question is whether he has presented evidence sufficient to create a genuine issue of material fact as to the fourth element. "At the inference-of-discrimination stage, [a] plaintiff may show pretext, among other ways, by showing that an employer (1) failed to follow its own policies, (2) treated similarly-situated employees in a disparate manner, or (3) shifted its explanation of the employment decision.'" Young v. Builders Steel Co., 754 F.3d 573, 578 (8th Cir.2014)(quoting Lake v. Yellow Transp., Inc., 596 F.3d 871, 874 (8th Cir. 2010). "This Court has two lines of cases on the standard to determine whether employees are similarly situated' at the prima facie stage of the McDonnell Douglas test.' "One line sets a low threshold, ' requiring only that the employees are involved in or accused of the same or similar conduct and ...


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