Porter v. Five Star Quality Care-MI, LLC

26 F. Supp. 3d 694, 2014 WL 2795146, 2014 U.S. Dist. LEXIS 83942
CourtDistrict Court, E.D. Michigan
DecidedJune 20, 2014
DocketCase No. 13-13855
StatusPublished
Cited by3 cases

This text of 26 F. Supp. 3d 694 (Porter v. Five Star Quality Care-MI, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Porter v. Five Star Quality Care-MI, LLC, 26 F. Supp. 3d 694, 2014 WL 2795146, 2014 U.S. Dist. LEXIS 83942 (E.D. Mich. 2014).

Opinion

OPINION AND ORDER REGARDING DEFENDANT FIVE STAR’S MOTIONS FOR SUMMARY JUDGMENT AND PLAINTIFFS’ MOTION TO AMEND COMPLAINT

GERALD E. ROSEN, Chief Judge.

I. INTRODUCTION

Plaintiffs Donna Porter, Kimberly Dean, Diann Wood, Julie Frame, Yvonne Preuitt, Doris McClelland, and Barbara Simpson commenced this suit in this Court on September 10, 2013, asserting claims under the federal Family and Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq., and state-law breach of contract claims against Defendants Five Star Quality Care-MI; LLC (“Five Star”) and Farmington Nursing, LLC (“White Pine”).1 Plaintiffs’ claims arise from Defendant. Five Star’s sale of a nursing home in Farmington, Michigan to Defendant White Pine, with Plaintiffs alleging that Defendants (i) unlawfully terminated their employment at the Farmington facility in connection with this sale, and (ii) failed to pay all of the compensation due to Plaintiffs upon the termination of their employment. This Court’s subject matter jurisdiction over this action rests upon Plaintiffs’ assertion of claims arising under federal law. See 28 U.S.C. § 1331.

Through the present pair of motions, Defendant Five Star seeks an award of summary judgment in its favor on Plaintiffs’ claims against it, as well as an award of summary judgment in its favor on a crossclaim brought by Five Star against co-Defendant White Pine. In support of the first of these motions, Five Star argues that Plaintiffs cannot show that Five Star discharged them in retaliation for their exercise of rights under the FMLA, where Five Star terminated the entire workforce at the Farmington facility, and hot just Plaintiffs, in connection with its sale of the facility to Defendant White Pine. Five Star further contends that none of the Plaintiffs has pled a viable breach of contract claim. In support of its second motion, Five Star asserts that White Pine owes a duty under the purchase agreement for the Farming-ton facility to defend and indemnify Five Star against any liability or expense arising out of any cause of action that accrued after the sale of the facility, and it contends that White Pine has breached this duty by failing to assume Five Star’s defense of this case or reimburse Five Star for the attorney fees and costs it has incurred to date.

Each of Five Star’s motions has been fully briefed by the parties. Having reviewed the parties’ briefs in support of and opposition to these motions, as well as the [697]*697accompanying exhibits and the remainder of the record, the Court finds that the relevant allegations, facts, and legal arguments are sufficiently presented in these written submissions, and that oral argument would not aid the decisional process. Accordingly, the Court will decide Five Star’s motions “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. This opinion and order sets forth the Court’s rulings on these motions.

II. FACTUAL BACKGROUND

In October of 2012, Defendant Five Star entered into a “Purchase and Sale and Operations Transfer Agreement” (the “Purchase Agreement”) with co-Defendant White Pine,2 under which Five Star agreed to sell a Farmington nursing home and other assets to White Pine. (See R. 36, 10/2/2012 Purchase Agreement.) Through a subsequent amendment to the Purchase Agreement, Five Star and White Pine agreed to a closing date of April 30, 2013 for the sale of the Farmington facility, and they agreed that Five Star would continue to operate the facility “through 11:59 p.m. on the Closing Date” and would “be responsible for the expenses and entitled to the income relating to such operations on the Closing Date.” (R. 36, Third Amendment to Purchase Agreement at ¶¶ 1.1, 1.2.) It is undisputed that all seven of the Plaintiffs were employed at the Farming-ton facility as of the closing date of April 30, 2013. (See First Amended Complaint at ¶ 11.)

Two provisions of the Purchase Agreement are especially pertinent to the issues presented in Five Star’s two pending motions. First, the Purchase Agreement called for Five Star to “terminate ... the employment of each of the employees at its [Farmington] facility immediately prior to the Closing,” and provided that White Pine would then “offer substantially all such employees the opportunity to continue his/ her employment in a similarly situated position, with compensation and benefits comparable to those provided to such employees by [Five Star] immediately prior to the Closing.” (R. 36, Purchase Agreement at ¶ 8.5.)3 Next, the Purchase Agreement contained the following indemnification provision:

. [White Pine] will defend, indemnify and hold [Five Star] harmless from and against any and all liability, damage, loss, cost, or expense arising out of or otherwise in connection with: ... (c) any cause of action accruing from and after the Closing Date under or with respect to the Facilities or the operation thereof ...; and/or (e) any and all third party claims, including any suit, action, or other proceeding brought by applicable Governmental Authorities against [Five Star] or its Facility (i) arising from the operation thereof by [White Pine] from and after ... the Closing Date....

(Id. at ¶ 11.4.)

According to the complaint, Plaintiffs and the other Five Star employees who worked at the Farmington facility were [698]*698advised shortly before the closing date that White Pine would be assuming the operation of the facility. (See First Amended Complaint at ¶ 10.) Plaintiffs and their fellow employees were further informed that their employment would be terminated by Five Star, and that they would have to submit applications to White Pine if they wished to continue working at the Farmington facility. (See id.) On or around the closing date of April 30, 2013, Five Star terminated Plaintiffs’ employment, and each of the Plaintiffs submitted an application for employment with White Pine. (See id. at.H 11.)

All but one of the Plaintiffs were hired by White Pine for a day or two after White Pine assumed control of the Farmington facility on May 1, 2013, but each of these Plaintiffs was then “advised that [her] employment by White Pine was terminated.” (Id. at ¶ 12.) The remaining Plaintiff, Julie Frame, was on medical leave at the time that Five Star transferred the operation of the Farmington facility to White Pine, and she, unlike the other Plaintiffs, was never hired by White Pine to continue working at the facility. (See id. at ¶¶ 9,12.)

This lawsuit followed on September 10, 2013, with Plaintiffs asserting federal FMLA claims and state-law breach of contract claims against both Five Star and White Pine. In support of their FMLA claims, Plaintiffs allege that White Pine terminated their employment shortly after .its purchase of the Farmington facility— or, in the ease of Plaintiff Frame, elected not to extend an offer of employment — on the impermissible ground that Plaintiffs had exercised their FMLA rights while employed by Five Star by taking medical leaves of absence. (See id.

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26 F. Supp. 3d 694, 2014 WL 2795146, 2014 U.S. Dist. LEXIS 83942, Counsel Stack Legal Research, https://law.counselstack.com/opinion/porter-v-five-star-quality-care-mi-llc-mied-2014.