Free Status Report - District Court of Arizona - Arizona

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FENNEMORE CRAIG Ronald J. Stolkin (No. 002552) Whitney Sedwick Meister (No. 022686) 3003 North Central Avenue Suite 2600 Phoenix, AZ 85012-2913 Telephone: (602) 916-5000 Email: [email protected] Email: [email protected] Attorneys for Defendants Regis Corporation; Super Cuts

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MARY CSANYI, a single woman, Plaintiff, v. REGIS CORPORATION; SUPER CUTS, Defendants. No. CV 03-1987 PHX JAT DEFENDANT SUPER CUTS' SEPARATE STATUS REPORT

In accordance with this Court's Order dated May 7, 2008, Defendant Super Cuts submits this Separate Status Report.1 Background of Communication Related to Status Report Defendant attempted to resolve the remaining issue, i.e., health insurance benefits in October, 2003, with Plaintiff. Because the amount of money related to the FMLA
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F ENNEMORE C RAIG
PROFESSIONAL CORPORATION P HOENIX

Defendant is filing a Separate Status Report because Plaintiff did not submit her proposal for a resolution of the FMLA issue until Saturday, May 31, 2008 at approximately 12:20 p.m., when she faxed that proposal to Defendant's attorney's office. Not having received plaintiff's suggestion for a resolution of the FMLA issue earlier, Defendant's attorney prepared a Separate Status Report for filing with the Court on June 2, 2008 because he is working out-of-state June 2-4, 2008. By the time Defendant's attorney learned of Plaintiff's proposal, and because he would be out-of-state, he had no opportunity to jointly prepare with Plaintiff a joint status report. Defendant's attorney's secretary has informed Plaintiff of these facts and that Defendant would be filing this Separate Status Report.

Case 2:03-cv-01987-JAT

Document 131

Filed 06/02/2008

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claim was minuscule, and in the interests of the economies of the Court and the parties, Defendant proposed to pay Plaintiff the expenses she claimed to have incurred for medical expenses in October 2003 that, according to Plaintiff, were not covered by her medical insurance. The amount Defendant proposed to pay was based on the evidence Plaintiff herself submitted at the trial of this matter through Exhibit 44. (A copy of Exhibit 44 is attached hereto for the Court's convenience.) Plaintiff rejected Defendant's attempt to resolve this matter and declared that she would seek a bench trial and demand: (1) medical expenses of $3,800.00 from September 17 through December 10, 2003; (2) liquidated damages in the amount of $7,600.00; (3) attorneys' fees of $33,000.00; (4) taxable costs of $5,600.00; (5) lost wages of $15,667.00; (6) lost medical treatment of $56,140.00; and (7) prejudgment and other interest in the amount of $141,296.12. For the reasons set forth below, Defendant disagrees both with Plaintiff's intent to request a bench trial and the relief she said she would request. A Bench Trial Is Not Appropriate A bench trial in this case took place June 7-13, 2006, during which the Plaintiff submitted all of her evidence. Another bench trial is not warranted. The Ninth Circuit did not remand this matter for a retrial but, rather, for a determination of appropriate remedies under the FMLA based upon the evidence submitted during the trial. The Remedies Plaintiff Now Seeks Are Beyond What the Ninth Circuit Ordered, And Are Not Provided By The FMLA Or Supported By The Evidence. To refresh the Court's recollection about Plaintiff's FMLA claim, Plaintiff did not claim that she was denied FMLA leave or an extension of that leave. Indeed, she admitted that all of her requests for FMLA leave were granted. Similarly, Plaintiff did not claim she was fired for exercising her rights to take FMLA leave.2
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Plaintiff admitted that she was not terminated. She testified that at the end of her FMLA leave, and even

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Plaintiff's only FMLA claim was that her health insurance ended on September 30, 2003 and that she should have received health insurance benefits through October, 2003. That Plaintiff's FMLA claim was limited to her medical expenses in October, 2003, as set forth in Exhibit 44, was made clear in her attorney's closing argument: Under the FMLA, she's also entitled to reimbursement for the $286 (sic) she paid for her medical insurance in October [2003]. She's entitled to payment for her out-of-pocket medical expenses, and that's in Exhibit 44, what she paid to Dr. Martin. She's entitled to an equal amount of liquidated damages plus interest on that amount.3 (Trial Transcript, June 13, 2006, 92:25-93:5) (emphasis added.) During the trial, Plaintiff never argued for or, more importantly, introduced evidence of medical expenses of $3,800.00 from September 17 through December 10, 2003 (the only relevant period, and the period for which Plaintiff introduced evidence, was the month of October, 2003), lost wages of $15,667.00, or lost medical treatment (whatever this may be) of $56,140.00. There simply is no basis for these new claims. Plaintiff's Damages are Limited To Her Expenses Incurred in October, 2003 In its Memorandum, the Ninth Circuit makes it clear that the "appropriate remedies" are limited to the "health insurance [benefits] through the end of October 2003." Memorandum at 4-5. The appellate court did not provide for anything else, including lost wages or lost medical treatment. In general, if a plaintiff proves a violation of the FMLA, he may recover his actual

though she was physically and mentally able to work, she abandoned her job at Defendant's Bell Road store (the store where she worked when she begancommenced her FMLA leave) because she did not want to drive that far. Plaintiff never gave notice that she was quitting. She simply never went back. At trial, Plaintiff confused Defendant's responsibilities under the FMLA with its responsibilities under the Americans with Disabilities Act ("ADA") by claiming that Defendant had to accommodate her desire to work closer to home. But there was no ADA claim in this lawsuit. Plaintiff failed to understand that, when she was released back to work, Defendant's obligation under the FMLA was to return her to the same position she held when her leave commenced ­ which it tried to do. 29 C.F.R. § 825.214. 3 Plaintiff's medical insurance premium for October, 2003 was $186, not $286. See Trial Exhibit 6.

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economic loss and an additional reward of liquidated damages if defendant acted in bad faith. 29 U.S.C. § 2617(a)(1)(A). In this case, the Court's consideration of an appropriate remedy is limited only to the measure of Plaintiff's damages for lost insurance benefits for October, 2003. "The correct measure of damages for lost insurance benefits in FMLA cases is either actual replacement cost for the insurance, or expenses actually incurred that would have been covered under a former insurance plan." Lubke v. City of Arlington, 455 F.3d 489 (5th Cir. 2006). In Lubke, the court provided the following cogent explanation: [The] plain language [of 29 U.S.C. § 2617(a)(1)(A)] does not assist in answering whether, as the district court determined, the value of lost insurance benefits alone is a proper measure of damages. Our holdings in similar Age Discrimination in Employment Act ("ADEA") cases, however, are instructive. In ADEA cases, an employee "is limited to recovery of those expenses actually incurred by either replacement of the lost insurance or occurrence of the insured risk." Pearce v. Carrier Corp., 966 F.2d 958, 959 (5th Cir.1992); see also Brunnemann v. Terra Int'l, Inc., 975 F.2d 175, 179 (5th Cir.1992). Although Lubke disputes the applicability of ADEA cases, the ADEA incorporates the remedies available under the Fair Labor Standards Act ("FLSA"). See 29 U.S.C. § 626(b). Moreover, "the legislative history of the FMLA reveals that Congress intended the remedial provisions of the FMLA to mirror those in the FLSA." Nero v. Indust. Molding Corp., 167 F.3d 921, 928 (5th Cir.1999) (quoting Frizzell v. Southwest Motor Freight, 154 F.3d 641, 644 (6th Cir. 1998)). Because the remedies available under the ADEA and the FMLA both track the FLSA, cases interpreting remedies under the statutes should be consistent. Consequently, we hold that the correct measure of damages for lost insurance benefits in FMLA cases is either actual replacement cost for the insurance, or expenses actually incurred that would have been covered under a former insurance plan. The lost "value" of benefits, absent actual costs to the plaintiff, is not recoverable. 4 Lubke, 455 F. 3d at 499 (emphasis added). Plaintiff's evidence at the trial was limited to the expenses she actually incurred
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Actual replacement cost for the insurance is not appropriate here because Plaintiff quit her job on November 3, 2003 and, therefore, was not entitled to Defendant's health insurance beyond October, 2003, except at her own cost through COBRA.

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that she claims would have been covered under her health insurance in October, 2003, as were set forth in Exhibit 44. BY MS. WILSON-GOODMAN: Q. A. Q. A. Q. A. Mary, would you look at that Exhibit 44 that I just handed you? Yes. Can you identify that document? Yes, I do. What does that document mean to you? On the visits what I did to Dr. Martin and the payments.

(Trial Transcript, Day 1, 174:23-175:6) Plaintiff's Exhibit 44 shows that, in October 2003, Plaintiff incurred actual expenses for psychotherapy of $120.00 on October 21, 2003.5 Any Claim Beyond Medical Expenses In October 2003 Goes Beyond The Ninth Circuit's Order And Is Not Supported By The Evidence. After her FMLA ceased on November 3, 2003, Plaintiff decided that she no longer wanted to drive to the Bell Road store and quit her job without notice. As a result: (1) she was no longer an employee of Defendant; (2) she was no longer entitled to employee health insurance through Defendant; and (3) medical expenses and health insurance after October 30, 2003 were solely Plaintiff's responsibility.6 See, e.g., Ariza v. Vallicorp, Inc., 141 F.3d 1173 (9th Cir. 1998) (no remedy under the FMLA where, within days of requesting FMLA leave, plaintiff was fired for her role in a cash shortage, and, therefore, she was unable to return to work and could not be reinstated.)
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Plaintiff testified that her insurance was effective through September 30, 2003. No evidence was presented at trial that the $260.00 charge appearing on Exhibit 44 for psychiatric evaluation on September 24, 2003, was not covered by insurance. 6 Having quit her job, Plaintiff could have elected to continue her coverage under COBRA or purchase her own coverage. Under either alternative, the responsibility was solely Plaintiff's

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Plaintiff's Request For Attorneys' Fees And Interest Are Absurd First, Plaintiff has provided no basis for claims for attorneys' fees and interest in amounts of $33,000.00 and $141,296.12, respectively. Second, and apart from the fact that she has provided Defendant with no basis for these claims, they are patently absurd. Several points undermine Plaintiff's exorbitant claim for attorneys' fees: · While it is unknown what amount, if any, plaintiff paid to Ms. WilsonGoodman for attorneys' fees, it must be remembered that Ms. WilsonGoodman did not enter this case until approximately two years after the case began and did not participate in any of the discovery or dispositive motions. · When she unsuccessfully moved to continue the trial, Ms. Wilson-Goodman admitted that she had not prepared for trial because she believed the matter had settled. · The trial spanned only four days. (The trial did not take a full four days because, due to the Court's schedule, there were gaps in the proceedings on those four days.) · Of approximately 611 pages of trial transcript, the plaintiff dedicated only approximately 20 pages to her FMLA claim ­ approximately 3% of the time and effort that went into the case. Second, and with regard to Plaintiff's claim for interest, even giving credence to the Ninth Circuit's decision, if Plaintiff's actual expense is $120.00 (or $240.00 if liquidated damages are included), interest could not possibly be $141,296.12. Defendant's Proposal A new trial is unwarranted. The evidence already is before the Court. In light of Plaintiff's unreasonable overreaching, Defendant believes the Court can mediate this minor remaining portion of the case. The amount in controversy is so small that any time expended by the Court and the parties simply is not in the economical interests of the Court or the parties. If attempts to reach a mutually amicable resolution cannot be reached, Defendant requests that the Court set the appropriate remedy under the evidence in the record and the law as set forth in this Status Report. / / /
Document 131- 6 - Filed 06/02/2008

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2069663

DATED this 2nd day of June, 2008. FENNEMORE CRAIG By /s/ Ronald J. Stolkin Ronald J. Stolkin Whitney M. Sedwick Attorneys for Defendants Regis Corporation; Super Cuts

CERTIFICATE OF SERVICE I hereby certify that on June 2, 2008, I electronically transmitted the attached document to the clerk's office using the CM/ECF system for filing and I served the attached document by mail on the following person is not a participant in the CM/ECF system: Mary Csanyi 8627 E. Northland Drive Scottsdale, Arizona 85251 /s/ Julie Calvano Tolby Julie Calvano Tolby

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Case 2:03-cv-01987-JAT

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