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Arends v. Extendicare Homes, Inc.: US District Court : EMPLOYMENT - no whistleblower report, but fact questions regarding refusal to do something illegal

Civil No. 07-995(DSD/SRN)
Stephanie A. Arends,
Extendicare Homes, Inc., d/b/a
Robbinsdale Rehabilitation and
Care Center,
Jonathan G. Steinberg, Esq. and Chrastil & Steinberg, 412
Fourth Street South, Suite 1155, Minneapolis, MN 55415,
counsel for plaintiff.
John D. Thompson, Esq., Leonard B. Segal, Esq. and
Oberman, Thompson & Segal, One Financial Plaza, 120 South
Sixth Street, Suite 850, Minneapolis, MN 55402, counsel
for defendant.
This matter is before the court upon defendant Extendicare
Homes, Inc.’s (“Extendicare”) motion for summary judgment and
plaintiff Stephanie Arends’s (“Arends”) appeal from the magistrate
judge’s December 7, 2007, order. Based upon a review of the file,
record and proceedings herein, and for the reasons stated, the
court grants in part and denies in part defendant’s motion and
affirms the magistrate judge’s order.
This federal diversity action arises out of Extendicare’s
termination of Arends on October 6, 2006. From March 2006 until
her termination, Arends typically worked the night shift at
Extendicare as a Licensed Practical Nurse (“LPN”) in the
transitional care unit (“TCU”). On May 17, 2006, Arends and
Extendicare entered a Retention Bonus Agreement (“Bonus Agreement”)
in which Extendicare agreed to pay Arends ,000 after ninety days
employment and ,000 upon the completion of six months, nine
months and one year of employment. (Thorman Aff. Ex. 2.) The
bonus payments were contingent on Arends meeting minimum
performance standards, remaining in good standing with no
disciplinary or attendance issues and maintaining full-time
employment. (Id.) If Arends voluntarily left Extendicare or was
terminated for just cause before completing twelve months of
service, the Bonus Agreement required her to reimburse Extendicare
for the payments she had already received. Arends received the
,000 bonus and the first ,000 bonus before her termination.
At some time before October 2006, the Director of Nursing
Carol Roberts (“Roberts”) was informed that Extendicare was in a
roughly four-month period within which it could expect a surprise
inspection from the Minnesota Department of Health. (Roberts Dep.
at 83-84.) Because of the impending inspection, Roberts reviewed
a sample of charts in the TCU and determined that several were
incomplete. (Id. at 82-83.) To ensure that Extendicare was
prepared for the inspection, Roberts called Arends on October 4,
2006, and asked if she would work the night shift to review patient
charts and complete paperwork. (Arends Aff. ¶ 2; Def. Ex. 25.)
Tamara Williams, another Extendicare employee, was present and
overheard the conversation. Arends agreed to work the shift and
requested that Roberts provide written instructions for the
assignment. When Arends arrived for the night shift she found the
following instructions:
Stephanie Arends LPN is to go thru [sic] each
chart, starting at the recent admits and
complete assessments and care plans (make
notations applicable to each resident and sign
each care plan.) Stephanie IS NOT to do any
patient care (except an emergency). Write
down charts completed at end of shift give to
[Director of Nursing].
(Pl. Ex. B.)
Shortly after beginning her review of the charts, another LPN
in the TCU, Jonnie Kracklew (“Kracklew”), provided Arends with a
document from the Minnesota Board of Nursing entitled “FAQ: Nursing
Assessment and Care Planning” (“FAQ”). (Pl. Ex. E.) Citing
Minnesota Statutes § 148.171, subdiv. 14, the FAQ stated that the
“legal definition of the practice of practical nursing does not
include assessment.” The FAQ further provided that:
[t]he assessment, care planning, and
evaluating functions lie within the
[registered nurse (“RN”)] definition and scope
1 The record reflects that Roberts was aware of the FAQ,
contacted the Minnesota Department of Health about it and held a
meeting discussing it with members of the nursing staff within a
matter of weeks before giving Arends the October 4 assignment.
(See Roberts Dep. at 34-48; Amos Aff. ¶ 3.)
2 Arends testified that she had seen the FAQ before at another
job but did not realize that the documents were the same until
someone pointed it out at a later date. (Arends Dep. at 116.)
3 According to the Assistant Administrator for Extendicare,
Arends should have called Roberts or a nurse manager with her
question. (Schiller Aff. ¶ 3.) The record is unclear as to
whether a RN or nurse manager was present for Arends to consult.
(Compare Schiller Aff. ¶ 3 with Hughes Aff. ¶ 6.) Moreover, the
record reflects that Arends contacted the other LPNs because of
their seniority, and they saw no reason for Arends to call Roberts
at home. (Arends Aff. ¶¶ 6-8; Hughes Aff. ¶ 6.)
of practice. Therefore, it is the RN who is
responsible for writing and updating the care
plan. The LPN contributes to the development
of the care plan by reporting pertinent
observations and suggesting nursing
intervention modifications based on client
responses. Because the evaluation phase
includes ongoing reassessment of the client,
with appropriate revisions in the plan of
care, the LPN participates by observing and
reporting the client’s response to nursing
actions to the RN. The RN revises the plan as
is appropriate to meet the changing needs of
the client.
Upon receipt of the FAQ,2 Arends immediately stopped working
on the charts and consulted two senior LPNs on different floors.3
Both LPNs opined that Arends’s assignment exceeded the proper scope
of a LPN’s job duties. Kracklew and the two other LPNs also agreed
that Arends should write Roberts a note seeking clarification of
the assignment and, because she was directed not to do patient care
and had no other work to complete, clock out. (Arends Aff. ¶¶ 6-
7.) As a result, Arends clocked out at approximately two o’clock
in the morning after writing a note for Roberts to call her
regarding the assignment and attaching the FAQ with the relevant
language highlighted. (Pl. Ex. D; Arends Aff. ¶ 9.)
Arends worked her regularly scheduled night shift on October
5, 2006, and had no contact with Roberts until Roberts called a
meeting with Arends and the LPN clinical coordinator at the end of
Arends’s shift. At that meeting, Roberts presented Arends with a
first Absenteeism Notice regarding four occurrences, only one of
which had taken place in the three previous months and for which
Arends had provided a note from her dentist. (Pl. Exs. J, K.)
Arends refused to sign the notice. Roberts also informed Arends
that she had written Arends up for failing to administer pain
medication to a patient upon request. Arends challenged Roberts’s
claim. Roberts immediately consulted the records and after
determining that Arends had acted appropriately, tore up the
disciplinary notice. Nevertheless, Roberts informed Arends that
she was terminating Arends’s employment and, along with the LPN
clinical coordinator, escorted Arends off of the premises as the
night shift left and the day shift arrived. Roberts also refused
to provide Arends with the phone number for corporate headquarters
at that time. (Arends Aff. ¶ 12.) The written Disciplinary Action
Report (“DAR”) detailing Arends’s termination was signed by
Roberts, referenced the March 4 assignment and the FAQ and
indicated that Arends was terminated for refusing “to follow a
direct order from a supervisor (insubordination).” (Pl. Ex. F.)
Also attached to the DAR were copies of the written assignment and
the FAQ that Arends had attached to her note to Roberts.
Within hours of her termination, Arends called an Extendicare
hotline and contacted the Board of Nursing and Minnesota Department
of Health to complain about her termination. (Pl. Ex. G; Arends
Dep. at 84-85; Arends Aff. ¶ 13.) That same day, Arends had a
friend hand deliver a written request for her final paycheck. (Pl.
Ex. N; Arends Dep. at 85-86.) After receiving no response, Arends
faxed another request to Extendicare on October 10, 2006. Arends
received and deposited her paycheck that day, and the check cleared
three days later.
Arends filed a complaint in state court on January 18, 2007,
and an amended complaint on January 29, 2007, alleging violation of
the Minnesota Whistleblower Act (the “Act”), violation of Minnesota
Statutes §§ 181.13 and 181.171, and claims for wrongful discharge
and “breach of contract/promissory estoppel.” Extendicare removed
the action to federal court on February 8, 2007, and filed an
amended answer and breach of contract counterclaim on February 19,
4 At the January 11, 2008, oral argument on Extendicare’s
motion, the court requested letter briefing with respect to the
amount in controversy for purposes of diversity jurisdiction
pursuant to 28 U.S.C. § 1332(a). Based upon the parties’ filings,
the court is satisfied that federal jurisdiction is proper. (See
Doc. Nos. 62, 63.)
2007. On October 2, 2007, Extendicare moved for summary judgment
on all claims.4
I. Summary Judgment Motion
Rule 56(c) of the Federal Rules of Civil Procedure provides
that summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” See Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). A fact is material only when its
resolution affects the outcome of the case. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if the
evidence is such that it could cause a reasonable jury to return a
verdict for either party. See id. at 252.
On a motion for summary judgment, all evidence and inferences
are to be viewed in a light most favorable to the nonmoving party.
See id. at 255. The nonmoving party, however, may not rest upon
mere denials or allegations in the pleadings but must set forth
specific facts sufficient to raise a genuine issue for trial. See
Celotex, 477 U.S. at 324. Moreover, if a plaintiff cannot support
each essential element of its claim, summary judgment must be
granted because a complete failure of proof regarding an essential
element necessarily renders all other facts immaterial. Id.
A. Minnesota Whistleblower’s Act
Arends claims that Extendicare violated the Act by terminating
her employment. The Act forbids an employer from terminating an
employee because:
(a) the employee, ... in good faith, reports a
violation or suspected violation of any
federal or state law or rule adopted pursuant
to law to an employer or to any governmental
body or law enforcement official;
. . .
(c) the employee refuses an employer’s order
to perform an action that the employee has an
objective basis in fact to believe violates
any state or federal law or rule or regulation
adopted pursuant to law, and the employee
informs the employer that the order is being
refused for that reason;
(d) the employee, in good faith, reports a
situation in which the quality of health care
services provided by a health care facility,
organization, or health care provider violates
a standard established by federal or state law
or a professionally recognized national
clinical or ethical standard and potentially
places the public at risk of harm.
Minn. Stat. § 181.932, subdiv. 1.
The court analyzes a claim under the Act pursuant to the
burden-shifting framework set forth in McDonnell Douglas Corp. v.
Green, 411 U.S. 792 (1973). Under McDonnell Douglas, an employee
must make a prima facie showing that (1) she engaged in a
statutorily protected activity, (2) she suffered an adverse
employment action and (3) there is a causal connection between the
two. See Eliserio v. United Steelworkers of Am. Local 310, 398
F.3d 1071, 1078-79 (8th Cir. 2005); Cokley v. City of Otsego, 623
N.W.2d 625, 630 (Minn. Ct. App. 2001). If an employee establishes
a prima facie case, the burden shifts to the employer to articulate
a legitimate, nonretaliatory reason for the employee’s termination.
Buytendorp v. Extendicare Health Servs., Inc., 498 F.3d 826, 834
(8th Cir. 2007). The employee must then rebut the employer’s
proffered reason by showing that it is pretext for unlawful
retaliation. Id.
1. Good Faith Report
To establish a prima facie case under subsections (a) and (d)
of the Act an employee must show that she made a good faith report.
To “report” means to “make or present an often official, formal or
regular account of,” or “to relate or tell about; present.”
Janklow v. Minn. Bd. of Exam’rs for Nursing Home Adm’rs, 536 N.W.2d
20, 23 (Minn. App. 1995), aff’d, 552 N.W.2d 711 (Minn. 1996). A
good faith report is a report made for the purpose of exposing an
illegality. Skare v. Extendicare Health Servs., Inc., 515 F.3d
836, 841 (8th Cir. 2008) (citing Obst v. Microtron, Inc., 614
N.W.2d 196, 202 (Minn. 2000)). A court considers the employee’s
“‘purpose at the time the report[] w[as] made, not after subsequent
events have transpired.’” Gee v. Minn. State Colleges & Univs.,
700 N.W.2d 548, 555-56 (Minn. Ct. App. 2005) (quoting Obst, 614
N.W.2d at 202). Whether an employee “made a report in ‘good faith’
is a question of fact, but [a] court may determine as a matter of
law that certain conduct does not constitute a ‘report.’” Borgersen
v. Cardiovascular Sys., 729 N.W.2d 619, 624 (Minn. Ct. App. 2007)
(citation and quotation omitted).
In this case, there is no evidence that Arends intended to
expose an illegality at the time she left the note for Roberts.
Rather, the record establishes that Arends only sought
clarification of the written instructions because she did not think
that Roberts would ask her to do something illegal. (See Arends
Dep. at 61.) Because Arends did not leave the note for the purpose
of exposing an illegality, she did not make a statutorily protected
report and cannot establish a prima facie case under subsections
(a) and (d) of the Act. Accordingly, summary judgment on those
claims is warranted.
5 Arends asserts claims under subsection (c) of the Act and
the common law. Shortly before passage of the Act, the Minnesota
Court of Appeals recognized a cause of action protecting employees
from being terminated in violation of a “clear mandate of public
policy.” Phipps v. Clark Oil & Ref. Corp., 396 N.W.2d 588, 592
(Minn. Ct. App. 1986). After passage of the Act, the Minnesota
Supreme Court adopted the Act’s definition and held that under the
common law “an employee may bring an action for wrongful discharge
if that employee is discharged for refusing to participate in an
activity that the employee, in good faith, believes violates any
state or federal law or rule or regulation adopted pursuant to
law.” Phipps v. Clark Oil & Ref. Corp., 408 N.W.2d 569, 571 (Minn.
1987). However, “the Phipps cause of action is not merely a pre-
Whistleblower Act cause of action, but a cause of action with
continuing viability in the common law.” Nelson v. Product
Alternatives, 715 N.W.2d 452, 455 (Minn. 2006). Nevertheless, in
this case, because Arends’s common law wrongful discharge claim is
“largely duplicative of the cause of action under the Whistleblower
Act,” the court’s analysis applies equally to both. Id. at 455
2. Refusal to Perform Illegal Order5
Subsection (c) of the Act protects from retaliation an
employee who (1) received an order from her employer, (2) refused
to perform the order, (3) had an “objective basis in fact” to
believe that the order violated the law and (4) informed the
employer that her reason for refusing the order was her belief in
its illegality. Minn. Stat. § 181.932, subdiv. 1(c); see also
Gundacker v. Unisys Corp., 151 F.3d 842, 846-847 (8th Cir. 1998);
Grundtner v. Univ. of Minn., 730 N.W.2d 323, 329 (Minn. Ct. App.
First, Extendicare argues that Roberts did not order Arends to
complete assessments and care plans but rather merely “asked if she
wished to come in on a shift to work on th[e] paperwork.” (Def.
Br. at 28.) Once Arends agreed to work, however, Roberts expressly
ordered her in writing to review each chart and “complete
assessments and care plans.” (Pl. Ex. B.) Thus, Extendicare’s
argument fails.
Second, Extendicare argues that Arends did not refuse to
perform Roberts’s order but merely sought clarification. The
record, however, indicates that although Arends sought
clarification of the written order, she also refused to perform the
order as she understood it. Indeed, Arends was terminated for her
“refusal to follow a direct order from a supervisor.” (Pl. Ex. F.
(emphasis added)).
Third, Extendicare argues that Arends did not have an
“objective basis in fact” to believe the order violated the law.
In support of its argument, Extendicare refers to other documents
completed by Arends and other LPNs that are the same or similar to
those Roberts ordered her to complete. Moreover, Extendicare
contends that Arends knew of and understood the contents of the FAQ
through her schooling and previous employment, and therefore her
claim that she discovered the alleged illegality of the order when
Kracklew gave her the FAQ is unbelievable. The present conflict,
however, appears to stem from confusion over the actual breadth of
Arends’s order and the laws governing a LPN’s scope of practice.
Over the phone, Roberts indicated that Arends was only to review
charts and complete paperwork. The written instructions, however,
expressly ordered Arends to complete assessments and care plans.
If literally understood, these instructions would have contravened
the FAQ’s express admonition that the “assessment, care planning,
and evaluating functions lie within the RN definition and scope of
practice.” (Pl. Ex. E.) After Kracklew reminded Arends of the
FAQ, Arends contacted two senior LPNs who agreed that Roberts’s
written order exceeded a LPN’s scope of practice. Nevertheless,
Extendicare claims that no reasonable jury could conclude that
Arends believed that Roberts would ask her to engage in illegal
conduct given the imminency of the Minnesota Department of Health’s
surprise inspection and Roberts’s knowledge and understanding of
the FAQ. However, in light of the contents of the FAQ, Arends’s
alleged understanding of Roberts’s order and the response of the
two senior LPNs, the court determines that a genuine issue of fact
exists as to whether Arends had an objective basis in fact to
believe the order violated the law.
Finally, Extendicare argues that Arends did not inform Roberts
that her reason for refusing the order was because Arends believed
it to be illegal. Arends, however, attached a copy of the FAQ
highlighting the language she thought established the illegality of
Roberts’s order. The court determines that this is sufficient to
create a genuine issue of fact as to whether Arends informed
Roberts that she refused to complete the assignment because she
believed it to be illegal. Thus, viewing all evidence and
inferences in a light most favorable to Arends, the court
determines that a reasonable jury could conclude that Arends
engaged in statutorily protected activity.
Extendicare concedes that Arends suffered an adverse
employment action by being terminated but maintains that she was
not terminated because of her alleged statutorily protected
activity. Specifically, Extendicare argues that Arends was
terminated for walking off of the job without contacting management
and that the temporal proximity between Arends’s alleged protected
activity and her termination does not create a genuine issue of
fact as to causation. Extendicare’s argument, however, ignores the
unequivocal language in the DAR that Arends was terminated for
refusing to follow Roberts’s order. Thus, whether Roberts
terminated Arends for refusing to complete the assessments and care
plans or for leaving before completing her shift is a disputed
factual issue appropriately left for a jury to resolve. Therefore,
the court determines that Arends has established a prima facie case
of unlawful retaliation.
To satisfy its burden of articulating a legitimate,
nonretaliatory reason for Arends’s termination, Extendicare claims
that Arends cannot show that Roberts “was anything other than upset
that [Arends] had not completed an assignment that she was asked to
do, that she agreed to do, that she did not do, of which she
avoided completing even the noncontroversial portion, while walking
6 To support her argument, Arends cites pages 178 to 181 of
her deposition and to exhibit two of the Thorman Affidavit.
However, the exhibit is merely a copy of the Bonus Agreement and
Extendicare’s payment history under that agreement, and the
materials submitted by the parties do not include pages 178 to 181
of Arends’s deposition.
off the job without notifying any management.” (Def. Br. at 26-
27.) In substance, Extendicare reiterates its argument that
Arends’s conduct did not constitute statutorily protected activity
and thus her termination was nonretaliatory. However, because a
genuine issue of fact exists as to whether Arends engaged in
statutorily protected conduct, the court determines that
Extendicare has not stated a legitimate, non-retaliatory reason for
terminating Arends. Therefore, the court denies summary judgment
on Arends’s wrongful discharge claims under subsection (c) of the
Act and the common law.
B. Breach of Contract and Counterclaim
Arends maintains that at the time she was hired, Extendicare
promised her a ,000 “sign on bonus” after completion of a ninety
day probationary period. However, the only evidence in the record
pertaining to a bonus is the Bonus Agreement, the express terms of
which provide for incremental payments.6 See Hous. & Redev. Auth.
of Chisholm v. Norman, 696 N.W.2d 329, 337 (Minn. 2005) (extrinsic
evidence examined only if contract ambiguous). Thus, the issue is
whether Arends is entitled to the final ,000 under the Bonus
“The cardinal purpose of construing a contract is to give
effect to the intention of the parties as expressed in the language
they used in drafting the whole contract.” Art Goebel, Inc. v. N.
Suburban Agencies, 567 N.W.2d 511, 515 (Minn. 1997). Construction
of an unambiguous contract is a legal question for the court, while
construction of an ambiguous contract is a factual question for the
jury. See Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346
(Minn. 2003) (citations omitted). Whether a contract is ambiguous
is a question of law for a court to decide. Republic Nat’l Life
Ins. Co. v. Lorraine Realty Corp., 279 N.W.2d 349, 354 (Minn. 1979)
(citations omitted). “A contract is ambiguous if, based upon its
language alone, it is reasonably susceptible to more than one
interpretation.” Art Goebel, Inc., 567 N.W.2d at 515 (citation
omitted). However, “[w]here the parties express their intent in
unambiguous words, those words are to be given their plain and
ordinary meaning.” Motorsports Racing Plus, Inc. v. Arctic Cat
Sales, Inc., 666 N.W.2d 320, 323 (Minn. 2003) (citation omitted).
The Bonus Agreement provides that “[u]pon hire [the employee
is] eligible for a Retention Bonus in the amount of ,000" to be
paid in four installments over the course of a year, subject to
certain conditions. Further, the Bonus Agreement contemplates an
employee voluntarily leaving the company or being terminated for
just cause and requires repayment of paid bonuses upon the
occurrence of either. However, the Bonus Agreement is silent as to
7 In her amended complaint, Arends contends that her Employee
Handbook from Extendicare created an employment contract requiring
progressive discipline and requiring employees to report noncompliant
activity. (Am. Compl. ¶¶ 31, 32.) The court, however,
does not consider those arguments because Arends has not pursued
them. Moreover, even if Arends had pursued those arguments, the
whether an employee is entitled to full payment if she is
terminated without just cause. Therefore, the court determines
that the Bonus Agreement is ambiguous as to whether Arends is
entitled to the remaining bonus payments if Extendicare terminated
her without just cause, and the issue is one for jury resolution.
Extendicare, however, contends in support of its counterclaim
that it terminated Arends for just cause and is thus entitled to
repayment of the already remitted ,000. Just cause “generally
means a real cause or basis for dismissal as distinguished from an
arbitrary whim or caprice.” See Hilligoss v. Cargill, Inc., 649
N.W.2d 142, 146, 148 (Minn. 2002). In other words, just cause is
“some cause or ground that a reasonable employer, acting in good
faith in similar circumstances would regard as a good and
sufficient basis for terminating the services of an employee.” Id.
In consideration of the factual disputes addressed above with
respect to Arends’s wrongful discharge claims, the court determines
that whether Arends was terminated for just cause is an issue of
fact reserved for the jury. Therefore, the court denies summary
judgment on Arends’s breach of contract claim and Extendicare’s
record contains no facts suggesting that the Employee Handbook
created an employment contract. See Audette v. Ne. State Bank, 436
N.W.2d 125, 126 (Minn. Ct. App. 1989) (“Whether a handbook can
become part of the employment contract raises such issues of
contract formation as offer and acceptance and consideration.”
(citation and quotation omitted)).
C. Payment of Earned Wages
Arends argues that Extendicare was in default under Minnesota
Statutes § 181.13(a) by not paying her wages after her termination
and within twenty-four hours of her demand for payment. Section
181.13 provides that an employer is in default if a terminated
employee’s earned wages are not paid within twenty-four hours of
demand for payment. The statute further permits recovery by the
employee of “average daily earnings at the rate agreed upon in the
contract of employment,” for each day, up to fifteen, in which the
employer is in default. Minn. Stat. § 181.13(a); see also Minn.
Stat. § 181.171 (providing individual cause of action and damages
for violation of § 181.13).
Extendicare does not contest that Arends demanded payment on
October 6, 2006, but was not paid until a later demand on October
10, 2006. Therefore, the court denies summary judgment with
respect to those unpaid wages. Arends further argues, however,
that the ,000 in unpaid bonus payments constitute “wages or
commissions actually earned,” and that Extendicare improperly
withheld those payments. Minn. Stat. § 181.13(a). An earned bonus
constitutes “wages” under section 181.13. Kvidera v. Rotation
8 In her complaint, Arends also indicated that Extendicare
never paid her wages from October 5 and 6, 2006. (Am. Compl.
¶ 28.) After receiving clarifying documents from Extendicare,
however, Arends concedes that she was paid and withdraws her claim
with respect to those wages. (Pl. Br. at 41.)
Engineering & Mfg. Co., 705 N.W.2d 416, 423 (Minn. Ct. App. 2005).
As discussed above, however, an issue of fact remains as to whether
Arends is entitled to the remaining ,000 so that Extendicare
would be in default for refusing payment. Therefore, the court
also denies summary judgment on this claim with respect to the
unpaid bonus payments.8
II. Objections to Magistrate Judge Order
Arends appeals Magistrate Judge Susan Nelson’s December 7,
2007, order, denying Arends’s motion for leave to add a claim for
punitive damages. A district court reviews a magistrate judge’s
order with respect to a nondispositive motion under an “extremely
deferential” clearly erroneous or contrary to law standard. See
Reko v. Creative Promotions, Inc. 70 F. Supp. 1005, 1007 (D. Minn.
1999); 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); D. Minn.
L.R. 72.2(a).
Under Minnesota law, a plaintiff may not assert punitive
damages in her complaint but must instead later move to amend the
pleadings to claim punitive damages. Minn. Stat. § 549.191. A
court will grant the motion if it finds prima facie evidence of an
entitlement to punitive damages. Id. In this context, the term
prima facie “does not refer to a quantum of evidence, but to a
procedure for screening out unmeritorious claims for punitive
damages.” Thompson v. Hughart, 664 N.W.2d 372, 377 (Minn. Ct. App.
2003) (citation and quotation omitted). In reviewing the evidence,
a court “makes no credibility rulings, and does not consider any
challenge, by cross-examination or otherwise, to the plaintiff’s
proof.” Berczyk v. Emerson Tool Co., 291 F. Supp. 2d 1004, 1008
n.3 (D. Minn. 2003) (citation omitted).
Minnesota Statutes § 549.20 provides the applicable standard
for entitlement to punitive damages:
(a) Punitive damages shall be allowed in civil
actions only upon clear and convincing
evidence that the acts of the defendant show
deliberate disregard for the rights or safety
of others.
(b) A defendant has acted with deliberate
disregard for the rights or safety of others
if the defendant has knowledge of facts or
intentionally disregards facts that create a
high probability of injury to the rights or
safety of others and:
(1) deliberately proceeds to act in
conscious or intentional disregard
of the high degree of probability of
injury to the rights or safety of
others; or
(2) deliberately proceeds to act
with indifference to the high
probability of injury to the rights
or safety of others.
Because Arends asserts punitive damages based upon Roberts’s
alleged actions, the magistrate judge focused on Roberts’s state of
mind to determine whether Roberts acted with deliberate disregard
for the rights of Arends or others. (Mag. Order at 5.) Due to the
confusion over the scope of duties of LPNs and RNs and the breadth
of Roberts’s order, the magistrate judge concluded that “Arends’
superiors might have suffered from ignorance or confusion, but they
did not ‘deliberately disregard’ the rights or safety of others so
as to warrant a claim for punitive damages.” (Mag. Order at 11.)
Arends argues that the magistrate judge’s order is clearly
erroneous or contrary to law because it confuses Roberts’s state of
mind in issuing the order with her state of mind in terminating
Arends. (Pl. Obj. at 2.) Specifically, Arends claims that she
“has produced prima facie evidence that at the time of termination,
[Roberts] knew that [Arends] had a reasonable and good faith belief
that the assignment violated the [law].” (Id.)
Arends’s argument assumes that she has established the
possession of a right that Roberts deliberately disregarded. As
noted above, a question of fact remains as to whether Arends had a
right to be free from termination for refusing to perform Roberts’s
order. The magistrate judge was correct, however, that “this
presents a different question from the propriety of punitive
damages,” which require clear and convincing evidence of a right’s
existence. (Mag. Order at 6 n.4.) Moreover, although a fact issue
remains as to whether Arends had an objective basis to believe that
Roberts’s order violated the law, in light of the considerations
discussed above regarding that issue, the court determines that
Arends has not presented prima facie evidence establishing a right
under the Act that satisfies the heightened clear and convincing
standard. See Morrow v. Air Methods, Inc., 884 F. Supp. 1353,
1358-59 (D. Minn. 1995) (claim under Act survives summary judgment
but punitive damages not allowed). Accordingly, the court affirms
the magistrate judge’s order because it is neither clearly
erroneous nor contrary to law.
Based upon the above, IT IS HEREBY ORDERED that:
1. Defendant’s motion for summary judgment [Doc. No. 40] is
granted in part and denied in part.
2. The order of the United States Magistrate Judge dated
December 7, 2007, [Doc. No. 47] is affirmed.
Dated: April 10, 2008
s/David S. Doty
David S. Doty, Judge
United States District Court


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