Gordon v. Wells Fargo Bank, N.A.

• Court: Court of Appeals of Iowa
• Decided: May 26, 2021
• Docket: 20-0447
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 20-0447 Filed May 26, 2021

LANCE GORDON, Plaintiff-Appellant,

vs.

WELLS FARGO BANK-NATIONAL ASSOCIATION (N.A.), d/b/a WELLS FARGO HOME MORTGAGE; and WELLS FARGO & COMPANY, d/b/a WELLS FARGO HOME MORTGAGE; CHRISTIE PETERSON, in her individual and professional capacity; and TAD LINCOLN, in his individual and professional capacity, Defendants-Appellees. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Jeffrey D. Farrell,

Judge.

Lance Gordon appeals the district court order granting summary judgment

in favor of defendants. AFFIRMED.

Benjamin Bergmann and Jessica Donels of Parrish Kruidenier Dunn Gentry

Brown Bergmann & Messamer L.L.P., Des Moines, and Christopher Stewart of

Gribble, Boles, Stewart & Witosky Law, Des Moines, for appellant.

Michael A. Giudicessi and Susan P. Elgin of Faegre Drinker Biddle & Reath

LLP, Des Moines, for appellees Wells Fargo Bank, N.A., Wells Fargo & Company,

and Tad Lincoln.

Kelsey J. Knowles of Belin McCormick P.C., Des Moines, for appellee

Christie Peterson.

Considered by Doyle, P.J., and Tabor and Ahlers, JJ. 2

AHLERS, Judge.

Lance Gordon appeals the district court order granting defendant Wells

Fargo Bank, N.A.’s motion for summary judgment.1 Gordon’s suit alleges Well

Fargo and its employees engaged in race discrimination in violation of the Iowa

Civil Rights Act (ICRA) when they decided to terminate Gordon’s employment with

Wells Fargo. On appeal, Gordon argues (1) a material dispute of fact precluded

granting the summary judgment motion; (2) the district court erred by determining

Gordon’s managers could not be individually sued; and (3) Gordon is entitled to

recover under Iowa Code chapter 91A (2018) for the commissions he was entitled

to within thirty days of his termination.

I. Standard of Review

“We review a district court’s grant of summary judgment for correction of

errors at law.” Hedlund v. State, 930 N.W.2d 707, 715 (Iowa 2019). “Summary

judgment is appropriate only when the record shows no genuine issues of material

fact and the moving party is entitled to judgment as a matter of law.” Id.; Iowa R.

Civ. P. 1.981(3). We review the record in the light most favorable to the nonmoving

party, and give that party “every legitimate inference that can be reasonably

deduced from the record.” Id.

II. Discrimination Claim

Gordon alleges Wells Fargo discriminated against him on the basis of race

1 Gordon also appears to appeal the district court’s grant of summary judgment in favor of Wells Fargo & Company, the parent company which owns Wells Fargo Bank, N.A. However, Wells Fargo & Company never employed Gordon, and Gordon does not explain on appeal how Wells Fargo & Company is liable for any alleged wrongdoing. As such, we affirm the district court’s grant of summary judgment as to Wells Fargo & Company. 3

when it fired him from his job as a home mortgage consultant. To prevail on a

race-discrimination claim under the ICRA, Gordon must show (1) he was a

member of a protected group; (2) he was qualified to perform the job and was

performing satisfactorily; (3) he suffered an adverse employment action; and

(4) circumstances permit an inference of discrimination. See Johnson v. Mental

Health Institute, No. 16-1447, 2018 WL 351601, at *8 (Iowa Ct. App. Jan. 10, 2018)

(McDonald, J., specially concurring) (citing Banks v. Deere, 829 F.3d 661, 666 (8th

Cir. 2016). There is no dispute as to the first and third elements, as Gordon is

African-American and suffered an adverse employment action by being

terminated. The fighting issue in this case is whether there is a genuine issue of

material fact regarding the second and fourth elements, which are intertwined in

this case.

Regarding the second element, we agree with the district court that the

undisputed facts establish Gordon was not performing his job satisfactorily. The

record shows Gordon’s position at Wells Fargo required him to submit accurate

and complete loan applications on behalf of potential Wells Fargo customers in

order to determine whether Wells Fargo can “pre-approve” the customers for home

loans. It was emphasized to Gordon during his training for the position that the

failure to include all relevant information could produce negative consequences for

Wells Fargo.

On July 9, 2017, Gordon completed a loan application for a husband and

wife over the phone. During the phone call, the applicants informed Gordon they

had an auto loan for a truck which they had acquired through Wells Fargo. Gordon

erroneously left that information off the application before submitting it to Wells 4

Fargo’s internal system for approving loans. He also failed to include the

applicants’ home mortgage liability in the application. As a result of these errors,

the applicants improperly received a more favorable pre-approved loan based on

the incorrect debt-to-income ratio reflected in the application.

As part of a routine audit, Wells Fargo’s quality assurance department

listened to the call between Gordon and the applicants and identified Gordon’s

errors on the application. An internal investigation was conducted by a separate

division within Wells Fargo, and that division recommended termination. The

recommendation was reviewed by Well Fargo’s Quality Assurance and Employee

Relations divisions, both of which concurred with the internal investigation’s

recommendation. Gordon was terminated in October 2017.

Gordon admitted that he made errors on the application. Nonetheless, he

maintains a genuine issue of material fact exists as to whether he has shown a

prima facie case of race discrimination under the ICRA. Like the district court, we

agree no such question of material fact exists. Gordon did not fulfill his duties as

an employee of Wells Fargo. While Gordon does not believe he should have been

terminated due to his mistakes, it is not the court’s place to second guess Wells

Fargo’s personnel decisions. See, e.g., Watkins v. City of Des Moines, No. 2020

WL 2988546, at *7 (Iowa Ct. App. June 3, 2020) (“[O]ur court is not equipped to

be a ‘super personnel department that second-guesses employers’ business

judgment.’” (citing Riley v. Elkhart Cmty. Sch., 829 F.3d 886, 895 (7th Cir. 2016))).

Gordon has not established he was performing his work satisfactorily, so he does

not meet the second element of a prima facie case for race discrimination. 5

While Gordon’s race discrimination claim fails as a result of his inability to

show satisfactory work performance, we will address the fourth element of a prima

facie case (i.e., circumstances permit an inference of discrimination), as it is

intertwined with Gordon’s job performance.2 To attempt to generate a factual

dispute that circumstances permit an inference of race discrimination, Gordon

relies primarily on an affidavit of a former co-worker, J.R., who is white. According

to his affidavit, J.R. also worked at Wells Fargo as a home mortgage consultant

before being promoted to a different position prior to leaving Wells Fargo. J.R.

asserts that, on “multiple occasions” during his time as a home mortgage

consultant, he “omitted and overlooked customers’ debt, income and asset

information that should have been included in their loan application” and that he

was negligent in doing so. J.R. further asserts he was allowed to correct the

2 As referenced above, we have approached our analysis of the prima facie case as being a four-element cause of action. See Johnson, 2018 WL 351601, at *8 (McDonald, J., specially concurring). There is also authority for approaching the prima facie case as consisting of three elements, namely (1) plaintiff is a member of a protected class, (2) plaintiff was performing the work satisfactorily, and (3) plaintiff suffered an adverse employment action. See Farmland Foods, Inc. v. Dubuque Human Rights Comm’n, 672. N.W.2d 733, 741 n.1 (Iowa 2003). In cases such as this, where a plaintiff offers no direct evidence of discriminatory intent, the McDonnell Douglas framework is invoked. See Smidt v. Porter, 695 N.W.2d 9, 14 (Iowa 2005) (referring to McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). The McDonnell Douglas framework requires the plaintiff to carry the burden of establishing a prima facie case of discrimination. Hedlund, 930 N.W.2d at 720. If the prima facie case is established, the burden shifts to the employer to articulate legitimate, nondiscriminatory reasons for its employment action. Id. If the employer meets that burden, the burden returns to the plaintiff to show the employer’s proffered reason was pretextual and that unlawful discrimination was the real reason for the employment action. Id. Here, we have found Gordon did not meet the second element of his prima facie case, which would justifiably end the discussion. However, analyzing the fourth element under Johnson involves much of the same discussion as would be involved in analyzing the McDonnell Douglas burden-shifting framework. So, our forthcoming discussion addresses both the prima facie case and the McDonnell Douglas framework. 6

omissions and never received any negative treatment as a result.3 So, according

to Gordon’s argument, Gordon and J.R. were similarly situated in that both made

the same mistakes in negligently failing to include accurate asset, debt, and

income information on customer’s loan applications, but they were treated

differently. Specifically, Gordon, the African-American employee, was terminated

while J.R., the white employee, suffered no adverse employment action. Thus,

Gordon argues, the circumstances permit an inference of racial discrimination, or,

in the terminology of the McDonnell Douglas burden-shifting framework, the claim

Gordon was fired for unsatisfactory job performance was pretextual and the real

reason for his termination was racial discrimination.

At first glance, Gordon’s argument appears compelling. However, careful

consideration of the facts, including J.R.’s affidavit, negates the persuasiveness of

3 In their entirety, the factual recitals in J.R.’s affidavit are: 1. I was born [in 1981], and I reside in Polk County, Iowa. 2. I am Caucasian and my skin color is white. 3. I worked at [Wells Fargo] for approximately three and a half (3 ½ years). 4. During my time working for Wells Fargo, I worked mostly as a Home Mortgage Consultant. I was later promoted to a [different position]. 5. As part of my job while working as a Home Mortgage Consultant, I was responsible for obtaining debt, income and asset information from prospective customers and seeking pre-approval for them during the home mortgage buying process. 6. On multiple occasions while obtaining information regarding a prospective customers’ debts, incomes and assets, I omitted and overlooked customers’ debt, income and asset information that should have been included in their loan application. These omissions were not done with ill intent but rather made accidentally due to my negligence. 7. After recognizing the omissions after the customer was preapproved, I was allowed to correct the omissions on the customer’s application. 8. I was never terminated or written up for failing to provide or omitting information on a loan application of a customer. 9. I left work with Wells Fargo voluntarily. 10. All of the facts expressed in this Affidavit are true and correct. 7

his argument. In particular, Wells Fargo’s lack of knowledge of several details

negates any inference of discriminatory intent.

First, as previously noted, Gordon’s errors were discovered by a random

quality assurance review of one of his loan application phone calls. The persons

responsible for discovering Gordon’s errors, investigating the errors, and making

the decision to terminate Gordon’s employment as a result were all employed in

divisions or departments of Wells Fargo geographically distanced from Gordon’s

work location. There is no evidence in this record that any of the persons involved

in the discovery, investigation, or resulting discipline knew Gordon or his race.

With no evidence the persons making the firing decision knew Gordon’s race, there

is no way to infer their actions were racially motivated.

Second, lack of evidence Wells Fargo knew of J.R.’s transgressions

negates any finding that J.R. and Gordon were similarly situated individuals and

thus negates any inference Gordon was treated differently based on race. Gordon

points out that whether individuals are similarly situated is typically an issue to be

resolved by a fact-finder at trial and not by summary judgment. See, e.g.,

Wyngarden v. State Judicial Branch, No. 13-0863, 2014 WL 4230192, at *10 (Iowa

Ct. App. Aug. 27, 2014). However, as the party faced with a motion supported by

evidence that undisputed facts warranted summary judgment, Gordon had the

obligation to produce competing evidence to generate a factual dispute. See Iowa

R. Civ. P. 1.981(5) (requiring party resisting summary judgment to “set forth

specific facts showing that there is a genuine issue for trial); Slaughter v. Des

Moines Univ. Coll. of Osteopathic Med., 925 N.W.2d 793, 808 (Iowa 2019) (noting

summary judgment is the “put up or shut up moment in a lawsuit” when the 8

resisting party must show facts that generate a factual dispute for resolution at

trial). Gordon has not done that. Nothing in J.R.’s affidavit or elsewhere in the

record suggests Wells Fargo knew about J.R.’s omissions that are claimed to be

similar to Gordon’s omissions. With no evidence Wells Fargo knew of J.R.’s

missteps, there is no factual dispute that J.R. is not similarly situated to Gordon.

In other words, with no evidence Wells Fargo knew about J.R.’s mistakes while

knowing about Gordon’s, in Wells Fargo’s eyes, the employees being compared

were J.R., a white man with no known unsatisfactory job performance, and

Gordon, an African-American man with known unsatisfactory job performance. In

that light, the two employees are not similarly situated and no racial discrimination

can be inferred from the decision to terminate Gordon for poor job performance,

even if it turned out J.R. secretly had done the same thing.

III. Individual Defendants

Gordon next argues the district court erred by dismissing the claims against

two Wells Fargo employees, Christi Peterson, his manager, and Tad Lincoln, his

second-level manager. As a preliminary matter, we note that Gordon’s claims

against Peterson and Lincoln are identical to the claims made against Wells Fargo.

For the same reasons Gordon’s claims against Wells Fargo fail, his claims against

Peterson and Lincoln fail as well. Furthermore, while a plaintiff making a claim

under the ICRA can recover against a supervisory employee, recovery cannot be

made against an individual employee who does not have the ability to influence or

control the employment action at issue. See Vivian v. Madison, 601 N.W.2d 872,

876–78 (Iowa 1999). Here, there is no evidence either Peterson or Lincoln had

any meaningful involvement with the decision to fire Gordon. The record indicated 9

neither were even aware of the decision to terminate Gordon had been made until

the day they received the instructions from the decision-makers to terminate him.

As such, the district court properly dismissed Peterson and Lincoln as defendants.

IV. Chapter 91A Claims

Finally, Gordon argues the district court erred by dismissing his claim for

unpaid wages related to commissions on loans he was working on which were “in

the pipeline” at the time of his termination. However, under Wells Fargo’s policies,

an employee who is terminated is only owed payment for loans which are “funded”

up by the date of termination. There is no dispute that the loans “in the pipeline”

were not funded at the time Gordon was terminated. As such, Gordon was not

entitled to compensation for commission related to those loans. In addition,

Gordon concedes his wage claim is tied to his discrimination claim, meaning if he

is not able to prevail on his discrimination claim, he cannot prevail on his wage

claim either. We have determined Gordon cannot prevail on his discrimination

claim, so his wage claim falls with it.

V. Conclusion

Finding no error in the district court’s grant of summary judgment disposing

of all Gordon’s claims, we affirm.

AFFIRMED.