McCarthy v. Nationwide Insurance Company of America

• Court: District Court, D. Arizona
• Decided: June 12, 2024
• Docket: 2:23-cv-02033
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Donna McCarthy, No. CV-23-02033-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 Nationwide Insurance Company of America, et al., 13 Defendants. 14 15 Pending before the Court is Defendants’ Nationwide Mutual Insurance Company 16 (“Nationwide”),1 Timothy M. McKercher (“McKercher”), and Maria Kupillas (“Kupillas”) 17 (collectively, the “Nationwide Defendants” or “Defendants”) Partial Motion to Dismiss 18 (Doc. 10). Plaintiff, Donna McCarthy (“McCarthy”) filed a response, (Doc. 15) and 19 Defendants filed a reply (Doc. 18). The Court has considered the pleadings and relevant 20 case law and will grant the Motion. 21 I. BACKGROUND 22 This Motion stems from a dispute from Plaintiff’s employment with and alleged 23 wrongful termination from Nationwide. (Doc. 10 at 2.) Nationwide is a group of 24 diversified insurance and financial service companies licensed to work in Maricopa 25 County, Arizona. (Doc. 10-2 at 3.) McKercher, a supervisor and managing attorney, and 26 Kupillas, a trial attorney, worked with Plaintiff at Nationwide. (Doc 1 at 2 ¶ 2.) In 2006, 27 1 Defendants note that the correct name of the company is Nationwide Mutual Insurance 28 Company, not Nationwide Insurance Company of America. (Doc. 10 at 1 n.1; Doc. 15 at 2 ¶ 1 n.1). 1 Plaintiff started as a paralegal/secretary at Nationwide and was promoted to paralegal 2 sometime in 2009 or 2010. (Doc. 1 at 4–5 ¶ 10.) A few years later, Plaintiff was promoted 3 to senior paralegal, and then to paralegal specialist. (Id.) As a paralegal specialist, Plaintiff 4 reported to the managing attorney, McKercher. (See Doc. 10–2.) Plaintiff alleges that she 5 was never disciplined for performance issues of any sort during her tenure with 6 Nationwide. (Doc. 1 at 4–5 ¶ 10.) 7 Plaintiff alleges that she was subject to harassment and a hostile work environment 8 that impacted her mental and physical health. (Id. at 14–15 ¶ 36.) Plaintiff further alleges 9 that she reasonably attempted to avoid the harm by abiding to every demand even if it 10 meant working late or on the weekends. (Id. at 15 ¶ 37.) Plaintiff also alleges that all 11 Defendants failed to exercise reasonable care to prevent and correct the harassing behavior. 12 (Id.) Additionally, Plaintiff alleges that she was subject to age and sex discrimination 13 because similarly situated male employees were assigned less work and were treated more 14 fairly. (Id. at 11 ¶ 25.) 15 Due to McKercher’s alleged inappropriate conduct, Plaintiff sent in a complaint to 16 Nationwide’s Human Resources (“HR”) department. (Doc. 1 at 5, 12–13 ¶¶ 11, 31.) She 17 alleged that McKercher sent harassing emails, singled Plaintiff out on case matters, forced 18 her to get a doctor’s note to receive one flexible day of working at home, and told Plaintiff 19 to look for another job. (Id.) Plaintiff alleges that she begged the HR employee to not tell 20 McKercher about the complaint due to fear of retaliation. (Id. at 5 ¶ 11.) However, 21 McKercher was allegedly told about the complaint. (Id.) Plaintiff alleges that McKercher 22 then asked Kupillas to find anything negative about Plaintiff for retaliation purposes. (Id.) 23 Plaintiff alleges that McKercher and Kupillas claimed she had made several changes to an 24 answer to a complaint that was filed with the court after Kupillas had signed it. (Id.) 25 On or about September 17, 2021, Plaintiff alleges that she was told to meet 26 McKercher in the conference room. (Id. at 6 ¶ 13.) Plaintiff alleges that McKercher threw 27 the answer at her and told her to admit changing it. (Id.) Plaintiff asserts she was fearful 28 of McKercher’s aggressiveness and admitted to changing the alignment of the answer and 1 signing the mailing certificate, as was allegedly protocol for several years that McCarthy 2 had been employed at Nationwide. (Id.) Several hours later, Plaintiff was instructed to 3 call HR and was told that she had ten minutes to leave the building or security would escort 4 her out. (Id. at 6–7 ¶ 14.) Plaintiff further alleges that the Defendants did this to embarrass, 5 humiliate, and injure her. (Id.) Plaintiff also alleges that she had to leave all her personal 6 affects and left the building crying and yelling while walking past her coworkers. (Id.) 7 Plaintiff claims that these events sent her into a deep depression, and she therefore 8 sought short-term disability aid. (Id. at 7 ¶ 16.) After being denied, Plaintiff was contacted 9 by Nationwide’s HR department and was told that management wanted to set up a meeting 10 to discuss the investigation. (Id. at 8 ¶ 16.) In November 2021, the meeting took place on 11 Zoom, which Plaintiff, McKercher, and an HR representative attended. (Id.) McKercher 12 told Plaintiff that she was fired from her job at Nationwide. (Id.) Plaintiff alleges that 13 there was no prior notice of the firing and that McKercher was hostile during the meeting. 14 (Id.) 15 In November 2021, McCarthy applied for unemployment benefits with the Arizona 16 Department of Economic Security (“ADES”). (Id. at 9 ¶ 19.) ADES denied this request 17 because it concluded that Plaintiff was fired “for cause” after statements from Defendants 18 about Plaintiff’s performance, abilities, and reputation—which Plaintiff contends were 19 false. (Id. at 8–9 ¶¶ 18–19.) Plaintiff appealed this decision and was ultimately able to 20 secure unemployment benefits. (Id. at 9–10 ¶¶ 19–20.) Plaintiff alleges the administrative 21 law judge (“ALJ”) came to this conclusion because Defendants’ representative allegedly 22 would not give over the investigation report as it was confidential, and Defendants’ 23 representative stated that Plaintiff had never been written up for poor work performance. 24 (Id.) 25 Plaintiff then filed a discrimination charge to the Employment Equal Opportunity 26 Commission (“EEOC”) in July 2022. (Doc. 10-1.) In response, Defendants provided a 27 position statement. (Doc. 10 at 9.) Defendants also provided an exhibit listing documents 28 that Plaintiff allegedly altered from 2018–2021, with Kupillas being the file manager on 1 them all. (Doc. 1 at 6 ¶ 12.) However, Plaintiff alleges that Kupillas was not employed by 2 Nationwide until 2021. (Id.) Plaintiff in turn alleges that Defendants falsely disclosed 3 information to the EEOC to intentionally injure the Plaintiff based on false allegations and 4 retaliation. (Id.) 5 Plaintiff then filed this lawsuit. (Doc. 1.) Plaintiff brings four claims against the 6 Defendants. (See id.) First, Plaintiff alleges that Nationwide and McKercher discharged 7 and discriminated against her with respect to compensation, terms, conditions, and 8 privileges due to her age. (Id. at 10 ¶¶ 20–29.) Second, McCarthy alleges that Defendants 9 retaliated against her for contacting human resources. (Id. at 12–13 ¶¶ 30–34.) Third, 10 Plaintiff alleges that Defendants created a hostile work environment, and that Plaintiff was 11 subject to a severe, persistent, and a hostile work environment that affected her work 12 product. (Id. at 14–16 ¶¶ 35–40.) Fourth, Plaintiff alleges that Defendants negligently 13 inflicted emotional distress upon her through their discriminatory, harassing, and 14 retaliatory actions. (Id. at 16–17 ¶¶ 41–45.) Defendants move to dismiss Counts I and IV. 15 (Doc. 10.) 16 II. LEGAL STANDARD 17 To survive a Rule 12(b)(6) motion for failure to state a claim, a complaint must meet 18 the requirements of Rule 8(a)(2). Rule 8(a)(2) requires a “short and plain statement of the 19 claim showing that the pleader is entitled to relief,” so that the defendant has “fair notice 20 of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 21 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). This 22 requirement is met if the pleader sets forth “factual content that allows the court to draw 23 the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft 24 v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the elements of a cause of 25 action, supported by mere conclusory statements, do not suffice.” Id. Plausibility does not 26 equal “probability,” but requires “more than a sheer possibility that a defendant has acted 27 unlawfully.” Id. A dismissal under Rule 12(b)(6) for failure to state a claim can be based 28 on either (1) the lack of a cognizable legal theory or (2) insufficient facts to support a 1 cognizable legal claim. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 2 1988). A complaint that sets forth a cognizable legal theory will survive a motion to 3 dismiss if it contains sufficient factual matter, which, if accepted as true, states a claim to 4 relief that is “plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 5 570). “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s 6 liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to 7 relief.’” Id. (quoting Twombly, 550 U.S. at 557). 8 In ruling on a Rule 12(b)(6) motion to dismiss, the well-pled factual allegations are 9 taken as true and construed in the light most favorable to the nonmoving party. Cousins v. 10 Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). However, legal conclusions couched as 11 factual allegations are not given a presumption of truthfulness, and “conclusory allegations 12 of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” Pareto 13 v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). A court ordinarily may not consider evidence 14 outside the pleadings in ruling on a Rule 12(b)(6) motion to dismiss. See United States v. 15 Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). “A court may, however, consider materials— 16 documents attached to the complaint, documents incorporated by reference in the 17 complaint, or matters of judicial notice—without converting the motion to dismiss into a 18 motion for summary judgment.” Id. at 908. 19 III. DISCUSSION 20 A. Count I – Age Discrimination 21 In Count I, Plaintiff alleges that she was wrongly discharged due to her age. (Doc. 22 1 at 10 ¶¶ 20–29.) Defendants point out that this claim was not discussed in the original 23 EEOC complaint, and Plaintiff concedes this point. (Doc. 10 at 3–5; Doc. 15 at 3.) Plaintiff 24 also agrees that this Count should be dismissed. (Doc. 15 at 3.) Given this agreement, the 25 Court will dismiss Count I with prejudice. 26 B. Count IV – Negligent Emotional Distress & Defamation 27 Defendants argue that Count IV should be dismissed because it is (1) preempted by 28 Arizona’s workers’ compensation statutes and, alternatively, (2) the allegations of the 1 claim are based on the same Title VII allegations for Counts II and III and are therefore 2 preempted. (Doc. 10. at 5–7.) Plaintiff does not respond to or address the issues of 3 preemption. The Court agrees with these arguments. 4 To begin, workers’ compensation in Arizona is the “exclusive remedy against [an] 5 employer or any co-employee” for injuries suffered by an employee at work. Ariz. Rev. 6 Stat. § 23-1022(A). Emotional distress can be compensable under the Workers’ 7 Compensation Act, as an injury, if there is some unexpected, unusual or extraordinary 8 stress that contributed to the distress. See Olive v. City of Scottsdale, No. 94-1028 PHX 9 EHC, 1996 WL 435132, at *2 (D. Ariz. Mar. 28, 1996). Due to this, a plaintiff’s state-law 10 tort claims are ordinarily dismissed. See Steinaker v. Sw. Airlines Co., No. CV-19-05022- 11 PHX-SPL, 2022 WL 3017420, at *4 (D. Ariz. July 29, 2022); Hunley v. Orbital Scis. Corp., 12 No. CV-05-1879-PHX-DGC, 2006 WL 2460631, at *5 (collecting cases). 13 However, in lieu of receiving workers’ compensation, an employee can elect to 14 maintain a legal action where an employer’s willful misconduct caused the employee’s 15 injury. McKee v. State, 388 P.3d 14, 18–19 (Ariz. Ct. App. 2016). Willful misconduct 16 must have four elements present: (1) The employer’s wilful misconduct must have been the cause of the 17 employee’s injury, 18 (2) the wilful misconduct must have been “an act done . . . knowingly and purposely with the direct object of injuring another,” 19 (3) the act that caused the injury must have been the personal act of the 20 employer, and (4) the act must have reflected “a wilful disregard of the life, limb or bodily 21 safety of employees.” 22 Id. at 19. Here, Defendants’ alleged conduct does not amount to willful misconduct. Put 23 simply, Plaintiff fails to allege or provide evidence of a willful disregard to her “life, limb 24 or bodily safety” as required by Arizona law. Id.; ARIZ. CONST. art. XVIII, § 8. Because 25 the willful misconduct exception does not apply, the Court agrees that this claim is 26 preempted by Arizona’s workers’ compensation scheme. 27 Even if preemption were not applicable, this claim is also barred by Title VII. Title 28 VII of the Civil Rights Act of 1964 is the “exclusive, pre-emptive administrative and 1 judicial scheme [available] for the redress of federal employment discrimination.” Brown 2 v. Gen. Servs. Admin., 425 U.S. 820, 829 (1976); 42 U.S.C. § 2000e-2(a)(1). Therefore, 3 tort claims that arise out of the same allegations as other Title VII claims are generally 4 barred. Simpson v. DeJoy, No. CV-20-00495-PHX-DWL, 2021 WL 2416831, at *10 (D. 5 Ariz. June 14, 2021); see also Sommatino v. United States, 255 F.3d 704, 711 (9th Cir. 6 2001) (holding that Title VII preempts state law tort claims including negligent infliction 7 of emotional distress). There is an exception to this rule for highly personal physical or 8 emotional injuries such as rape, sexual assault, and stalking. Sommatino, 255 F.3d at 711– 9 12. 10 The Court finds that there has not been an injury highly personal such as those just 11 mentioned to constitute an exception. Moreover, the Court finds that the negligent 12 infliction of emotional distress claim arises out of the same allegations of work harassment, 13 discriminatory and retaliatory actions as the other Title VII claims (Counts II and III). 14 Accordingly, the Court finds that the negligent infliction of emotional distress claim is 15 preempted by Title VII. Count IV will be dismissed with prejudice. 16 C. Defamation Claim 17 Plaintiff also appears to assert a defamation claim. (See Doc. 1 at 1–2.) The Court 18 will analyze it as such. See Zichko v. Idaho, 247 F.3d 1015, 1020 (9th Cir. 2001) (the court 19 liberally construes pro se filings). Defendants argue that the statute of limitations for a 20 defamation claim has run, and the Court agrees. 21 In Arizona, the statute of limitations for a defamation claim is one year. Ariz. Rev. 22 Stat. § 12-541(1). The statute of limitations begins to run upon publication of the 23 defamatory statement. Id.; see also Bresser v. Menta Grp., Inc., NFP, 934 F. Supp. 2d 24 1150, 1161 (D. Ariz. 2013). Here, the ADES unemployment hearing was in March 2021 25 and the EEOC statement was filed on September 23, 2022. (See Doc. 10 at 8.) From 26 Plaintiff’s Complaint, it appears that any alleged defamatory statements were made in one 27 of these two instances. (Doc. 1 at 6, 9–10 ¶¶ 12, 19.) Plaintiff filed her Complaint on 28 September 27, 2023. (Id.) Therefore, any alleged defamatory statement was published 1 || more than one year before Plaintiff filed this lawsuit, making it fall outside the statute of || limitations. Accordingly, to the extent that it is pled, the Court will dismiss the defamation 3 || claim with prejudice. 4 D. Individual Defendants and Voluntary Appearance 5 In her response, Plaintiff also asserts that Defendants’ Motion is premature because || Plaintiff has not yet served McKercher and Kupillas. (Doc. 15 at 4.) Defendants counter 7\| by noting that a defendant may voluntarily appear without being served. (Doc. 18 at 2.) 8 || The Court agrees with the Defendants that a defendant may voluntarily appear without 9|| service of process. 10 “For a judgment to be valid and binding upon the parties litigant, the parties affected 11 || must be either legally served with process or have voluntarily appeared.” McDonnell v. S. 12|| Pac. Co., 281 P.2d 792, 793 (Ariz. 1955) (emphasis added); see also Austin v. State ex rel. 13 || Herman, 459 P.2d 753, 755 (Ariz. Ct. App. 1969) (finding that a general appearance allows 14]| for waiver of any defect in service.) Here, McKercher and Kupillas voluntarily appeared 15 || through counsel. Moreover, Defendants state that they do not intend to raise any arguments regarding service of process. (Doc. 18 at 2.) Therefore, the Court rejects □□□□□□□□□□□ || argument and finds that the Motion was not premature. 18] IV. CONCLUSION 19 For the reasons discussed above, 20 IT IS HEREBY ORDERED granting Defendants’ Partial Motion to Dismiss || (Doc. 10). Counts I and IV will be dismissed with prejudice. Additionally, to the extent it is pled, Plaintiff's defamation claim will also be dismissed with prejudice. 23 Dated this 12th day of June, 2024. 24 — >

26 Aionorable Susan M. Brnovich =~ United States District Judge 27 28

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