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Garcia v. Communities in Schools of Brazoria County, Inc.

United States District Court, S.D. Texas, Houston Division

June 10, 2019



          Lee H. Rosenthal Chief United States District Judge

         Robert C. Garcia sued the Communities in Schools of Brazoria County, Inc., the Communities in Schools of Southeast Harris County, Inc., and seven individuals, alleging federal-law claims for age discrimination, and seeking damages and equitable relief for state-law claims for fraudulent misrepresentation, intentional infliction of emotional distress, breach of fiduciary duty, ultra vires acts in violation of corporate bylaws, civil conspiracy, conversion, and defamation. (Docket Entry No. 1 at ¶¶ 2-3). Garcia amended his complaint, the defendants moved to dismiss, and Garcia did not respond to the motion. (Docket Entry Nos. 32, 33). After a careful review of the amended complaint, the motion, and the applicable law, the court grants the motion to dismiss in part and denies it in part. (Docket Entry No. 33). Garcia must file an amended complaint, amending those allegations that were dismissed without prejudice, no later than June 21, 2019.

         The reasons for this ruling are detailed below.

         I. Background

         The court takes the well-pleaded factual allegations as true for the purposes of this motion. In 1996, Garcia helped found the nonprofit Communities in Schools of Brazoria County, Inc., which partnered with the Communities in Schools of Southeast Harris County to form the Communities in Schools Joint Venture. Garcia became, at age 50, the new organization's executive director. (Docket Entry No. 32 at ¶¶ 17, 18). Donna Montes, Cheryl Sellers, and Elizabeth Evans worked under Garcia at the Joint Venture. Sellers was the Director of Community Relations, and Evans was the Chief Financial Officer. (Id. at ¶ 19).

         In 2013, Garcia reached an agreement with the Communities in Schools Joint Venture Board relating to his eventual departure. (Id. at ¶ 20). Carol Bertholf, Roland Hendricks, and John Vasut were members of the Communities in Schools of Brazoria County Board; Bertholf served as that Board's chairperson; and Kelly Shea was the chairperson of the Communities in Schools Southeast Harris County Board. (Id. at ¶ 19). The agreement required the Joint Venture to pay Garcia for unused vacation time based on records that Garcia would submit from 2013 to September 2017. (Id. at ¶ 20).

         At a January 2017 Board meeting for the Communities in Schools Brazoria County, and at a February 2017 Board meeting for the Communities in Schools Southeast Harris County, Garcia announced that he would retire in June 2018. (Id. at ¶ 21). Garcia alleges that on February 24, 2018, he gave Bertholf a draft proposal of his retirement plan “to get her personal advice on [his] transition.” (Id. at ¶ 22). Garcia met with his executive staff on March 7, 2018, to discuss a revised draft that he wanted to present to the Joint Venture Board later that month. The staff agreed that Garcia should become a member of the Joint Venture board after he retired or remain as the Joint Venture's executive director. (Id. at ¶ 23).

         Garcia alleges that on March 6, 2018, before the scheduled Communities in Schools Southeast Harris County Board meeting, the chairperson, Shea, “held a secretive Board meeting, ” without informing Garcia. At that meeting, Shea allegedly falsely represented that Garcia “had submitted his resignation and agreed to terms for severance.” (Id. at ¶ 24). Montes, Evans, and Sellers were at the meeting. (Id. at ¶ 25). The Communities in Schools Southeast Harris County Board voted to terminate Garcia's employment, and Shea cancelled the Board meeting that Garcia was scheduled to attend later that month. (Id. at ¶¶ 25, 28).

         Garcia alleges that he never discussed his retirement proposal with, submitted his resignation to, or agreed to a severance package from, the Southeast Harris County Board. (Id. at ¶ 24). Garcia alleges that after the March 6 meeting, Montes, Evans, and Sellers did not tell him, their supervisor, about the discussions of his retirement. Instead, they allegedly began undermining Garcia at work by ignoring his emails, not copying him on emails, failing to notify him of meetings, taking unscheduled vacations, and leaving work unfinished. (Id. at ¶ 25). According to Garcia, the individual defendants began to “establish a false narrative . . . that [he] had committed financial fraud, created a toxic environment, racism, and mismanaged the organization.” (Id. at ¶ 26). These defendants allegedly falsely represented to other Board members that Garcia “had submitted his Draft Proposal to both boards and was seeking to retire in May 2018.” (Id. at ¶ 27). As noted, Garcia alleges that he gave the May 2018 draft to Bertholf to obtain her advice, but he did not submit it to either Board or to Shea for official action. (Id.).

         On March 21, Garcia told Bertholf that he would not retire until June 2018 and would instead remain as the executive director until the Communities in Schools Joint Venture started its next program year in September 2018. (Id. at ¶ 28). He emailed this information to the members of both Boards that same day. (Id.).

         The next day, Garcia attended a Joint Venture Board meeting. Bertholf, “without warning, due process, ” or good cause, announced that Garcia was resigning. (Id. at ¶ 29). Shea then gave Garcia an Age Discrimination in Employment Act and the Older Workers Benefit Protection Act release agreement and asked him to sign it during the meeting. Garcia was not given prior notice or an opportunity to seek an attorney's advice. (Id.). Garcia alleges that he “made a good-faith complaint to the Board members regarding his rights under the Age Discrimination in Employment Act, but he was “instantly retaliated against” by being terminated for not signing the release agreement. (Id.). Over Garcia's complaints about the release agreement's impact on his rights under the Age Discrimination in Employment Act and other statutes, the defendants “continued to attempt to coerce [Garcia] to sign immediately by waving a check in front of him.” (Id. at ¶ 31). Vasut allegedly “use[d] his position as a Judge to intimidate” Garcia, including stating that if he failed to resign and sign the release agreement, he would face a restraining order preventing him from returning to his office, talking to staff, or going to the school campuses that the Joint Venture served. (Id. at ¶¶ 30, 32). Garcia did not sign the agreement. (Id. at ¶ 32).

         Garcia asked that he be allowed to stay on as executive director until May 1, 2018, with no severance. The Board denied that request. (Id. at ¶ 33). Vasut “ordered Officer Castellow to escort” Garcia off the premises. (Id. at ¶¶ 33-34). Garcia was not allowed to collect his personal belongings. (Id. at ¶ 34). Bertholf and Shea later allowed Montes, Evans, and Sellers to enter Garcia's office and pack those belongings, but did not make them available to Garcia for almost 8 months. (Id. at ¶¶ 34, 37, 54).

         Bertholf, Shea, and Hendricks informed the Communities in Schools Joint Venture executive staff that Garcia had resigned and allegedly told the staff “that they would be fired if they discussed [Joint Venture] business with [Garcia].” (Id. at ¶ 38). Garcia alleges that these defendants made false accusations at the meeting about his health and his actions as executive director, suggesting financial improprieties. (Id.). Montes emailed all Joint Venture employees an announcement that Garcia had resigned. (Id.). Montes called a meeting of all Communities in Schools staff on March 28, 2018, to allegedly “falsely represent[] . . . that [Garcia] had resigned, allude[] to all employees to call 911 if [Garcia] should visit their campus, and not to talk to [Garcia] about [Communities in Schools] matters or they would be fired.” (Id. at ¶ 39). At a later meeting of both boards, an independent auditor stated that Garcia had not committed any financial wrongdoing. (Id. at ¶ 46).

         Garcia tried to appeal the decision in April 2018 by emailing the Communities in Schools Joint Venture Board for a hearing, in accordance with the Joint Venture Employee Manual. Bertholf denied that request and a second request Garcia sent in November 2018. (Id. at ¶ 43). The Joint Venture's attorney told Garcia that the organization would ship his personal belongings to him, but Garcia alleges that the “Board of Directors [was] using [his] personal property as a hostage to coerce him into signing a release and waiver of his claims and never intended to return his property until this action took place.” (Id. at ¶ 45). Garcia then received a second release agreement and a request for an immediate response. (Id. ¶ 48). Garcia refused to sign that agreement as well. (Id.). According to Garcia, the harassment and pressure continued. He alleges that Evans hired a private investigator, worked with Montes and Sellers to move Garcia's personal property out of his former office, and falsely told the Texas Workforce Commission that Garcia had resigned. (Id. at ¶¶ 49-51).

         Garcia filed a complaint with the Equal Employment Opportunity Commission in September 2018, and Garcia requested and received a right to sue letter. (Id. at ¶ 52). This lawsuit followed.

         According to Garcia, the March 22 meeting violated the Joint Venture bylaws, both on timely notice to Board members and on quorum requirements. (Id. at ¶ 36). Garcia alleges that the meeting was planned to avoid the expiration of several defendants' Board memberships in May 2018. (Id.). Garcia alleges that the defendants terminated, harassed, and discriminated and retaliated against him, because he was 71 years old. (Docket Entry No. 32 at ¶ 2). He also asserts fraudulent misrepresentation, promissory estoppel, intentional infliction of emotional distress, breach of fiduciary duty, violation of corporate bylaws, ultra vires acts, civil conspiracy, conversion, and defamation against the Board of Directors. (Id. at ¶ 3). Garcia seeks equitable relief, damages, and fees. (Id. at ¶ 2).

         II. The Standard for a Rule 12(b)(6) Dismissal

          Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Rule 8 “does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556).

         To withstand a Rule 12(b)(6) motion, a “complaint must allege ‘more than labels and conclusions, '” and “a formulaic recitation of the elements of a cause of action will not do.” Norris v. Hearst Tr., 500 F.3d 454, 464 (5th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Iqbal, 556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557). “[A] complaint ‘does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief-including factual allegations that when assumed to be true ‘raise a right to relief above the speculative level.'” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “Conversely, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. (quotation marks and alteration omitted).

         In considering a motion to dismiss under Rule 12(b)(6), “a district court must limit itself to the contents of the pleadings, including attachments.” Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000). Documents “attache[d] to a motion to dismiss are considered part of the pleadings, if they are referred to in the plaintiff's complaint and are central to [the] claim.” Id. at 498-99 (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993)). The court may also “take judicial notice of matters of public record.” Norris, 500 F.3d at 461 n.9.

         The court should generally give a plaintiff at least one chance to amend under Rule 15(a) before dismissing the action with prejudice, unless to do so would be futile. See Carroll v. Fort James Corp., 470 F.3d 1171, 1175 (5th Cir. 2006) (“[Rule 15(a)] evinces a bias in favor of granting leave to amend.” (quotation omitted)); Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002) (“[D]istrict courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs advise the court that they are unwilling or unable to amend in a manner that will avoid dismissal.”). A court may deny a motion to amend for futility if an amended complaint would fail to state a claim upon which relief could be granted. Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 232 (5th Cir. 2012). The district court has discretion to grant or deny leave to amend. Id.

         III. Analysis

         A. The Age Discrimination Claims

         The defendants argue that Garcia has not alleged facts that could show the defendants discriminated or retaliated against him because of his age. (Docket Entry No. 33 at 17, 21). The defendants also argue that Garcia's allegation that the defendants violated the Older Workers Benefit Protection Act's waiver provisions cannot be a basis for an independent Age Discrimination in Employment Act claim. (Id. at 15-17).

         1. The Age Discrimination in Employment Act Claim

         The ADEA makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age.” 29 U.S.C. § 623(a)(1); see Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 141 (2000). An employee who is at least 40 years old cannot be subjected to an adverse employment action because of the employee's age. 29 U.S.C. § 631(a); see Rutland v. Moore, 54 F.3d 226, 228 (5th Cir. 1995) (citing 29 U.S.C. §§ 623(a), 631(a)). The prima facie elements of an ADEA claim are that the plaintiff: (1) is within the protected class; (2) is qualified for the position; (3) suffered an adverse employment decision; and (4) was replaced by someone younger or treated less favorably than similarly situated younger employees. Leal v. McHugh, 731 F.3d 405, 410-11 (5th Cir. 2013) (citing Smith v. City of Jackson, 351 F.3d 183, 196 (5th Cir. 2003)). The Supreme Court has held that to survive a Rule 12(b)(6) motion to dismiss, “an employment discrimination plaintiff need not plead a prima facie case of discrimination.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 515 (2002).

         Garcia alleges that he is within the protected class because he is over 40, was qualified for his executive director position, was terminated, and was replaced by Montes, a younger employee. (Docket Entry No. 32 at ¶ 58). Garcia has ...

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