Hartnett v. Papa John's Pizza USA, Inc.

828 F.Supp.2d 1278

Timothy HARTNETT, Plaintiff,

v.PAPA JOHN'S PIZZA USA, INC., Defendant.

No. CIV 10–1105 JB/CG.

United States District Court, D. New Mexico.

Oct. 7, 2011.

Patrick L. Fogel, The Fogel Law Firm, Albuquerque, NM, for Plaintiff.

Frederick C. Miner, J. Mark Ogden, Littler Mendelson, P.C., Phoenix, AZ, for Defendant.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on: (i) the Plaintiff's Motion for Summary Judgment, filed May 25, 2011 (Doc. 29); and (ii) the Defendant's Cross–Motion for Summary Judgment, filed June 14, 2011 (Doc. 33). The Court held a hearing on August 25, 2011. The primary issues are: (i) whether res judicata or collateral estoppel preclude Defendant Papa John's Pizza USA, Inc. (“Papa John's”) from arguing that it had a reasonable belief that it terminated Plaintiff Timothy Hartnett for cause; (ii) whether res judicata or collateral estoppel preclude Papa John's from arguing that Hartnett is an at-will employee; and (iii) whether res judicata or collateral estoppel preclude Hartnett from arguing retaliatory discharge. All parties agree that the issue of good cause was litigated in a prior workers' compensation case and that the Workers' Compensation Judge necessarily determined that it did not exist. The Court will grant in part Plaintiff's Motion for Summary Judgment and preclude the parties from relitigating the existence of good cause. The Court, however, will not preclude litigation whether Hartnett was an at-will employee or whether Papa John's reasonably believed in its good cause justification, because Hartnett failed to establish that either issue was litigated or determined in the workers' compensation case. Because Hartnett did not satisfy the requirements of collateral estoppel for those issues, the Court will deny in part Plaintiff's Motion for Summary Judgment. Because the parties agree that the retaliatory discharge claim is precluded and that summary judgment on that claim is appropriate, the Court will grant the Defendant's Cross–Motion for Summary Judgment and dismiss the retaliatory discharge claim (Count IV) with prejudice.

FACTUAL BACKGROUND

Papa John's employed Hartnett. See Plaintiff's Memorandum in Support of Summary Judgment ¶ 3, at 1–2, filed May 25, 2011 (Doc. 29–1) (“Plaintiff's Mem. Summary Judgment”); Defendant's Opposition to Plaintiff's Motion for Summary Judgment, filed June 14, 2011, ¶ 1, at 2 (Doc. 32) (“Defendant's Response”). ¹ On August 14, 2007, Plaintiff sustained an injury in an automobile accident. See Plaintiff's Mem. Summary Judgment ¶ 3, at 2; Defendant's Response ¶ 1, at 2. Hartnett worked light duty for Papa John's after the accident, and on October 17, 2007, Papa John's terminated Hartnett's employment for allegedly filing a false mileage voucher. See Plaintiff's Mem. Summary Judgment second ¶ 2, at 2; Defendant's Response ¶ 2, at 2.

On February 28, 2008, Hartnett submitted a complaint for workers' compensation benefits against Papa John's before the State of New Mexico Workers' Compensation Administration, see Hartnett v. Papa John's Pizza, WCA No. 088–00106. See Plaintiff's Mem. Summary Judgment ¶ 3, at 1; Defendant's Response ¶ 3, at 2. The Workers' Compensation Judge (“WCJ”) applies the New Mexico rules of civil procedure and rules of evidence. See N.M.S.A.1978, § 52–5–4; N.M.A.C. § 11.4.4.12; Plaintiff's Mem. Summary Judgment ¶ 4, at 2.

Nineteen contested issues were presented to the WCJ, including whether Hartnett's termination was for good cause. See Worker's Compensation Memorandum Opinion at 1–3, filed May 25, 2011 (Doc. 29–8) (“WCJ Opinion”). Papa John's alleged that it terminated Hartnett for good cause after Hartnett submitted false mileage vouchers. See Plaintiff's Mem. Summary Judgment at 6; WCJ opinion at 3. After extensive discovery, the parties tried the case on June 19, 2009. See Plaintiff's Mem. Summary Judgment ¶¶ 8–13, at 2–3. On April 20, 2010, the WCJ, Gregory Griego, issued the WCJ Opinion. See WCJ Opinion at 1. The WCJ found that “the Worker was not terminated for good cause,” that the “Employer's investigation was deeply flawed and relied on information which ultimately appears to be materially unreliable,” and that “there was a clear rush to judgment.” WCJ Opinion at 3. The WCJ also found that “there is an inadequate record in this case to demonstrate that Worker was terminated because of his seeking workers' compensation benefits.” WCJ Opinion at 3. On May 13, 2010, the WCJ entered his Compensation Order finding that Hartnett “was not terminated for good cause” and awarding benefits. Compensation Order at 4, 6–7, filed May 25, 2011 (Doc. 29–3). The Compensation Order also stated that “the termination of the Worker was not retaliatory for pursuing a workers' compensation claim.” Compensation Order at 4.

PROCEDURAL BACKGROUND

Hartnett filed this case in the Second Judicial District Court, Bernalillo County, State of New Mexico, on October 8, 2010. See Notice of Removal ¶ 1, at 1, filed November 19, 2010 (Doc. 1). Hartnett's Complaint alleged wrongful discharge, retaliatory discharge, defamation, and negligence. See Complaint for Damages For Wrongful Termination, Retaliatory Discharge, Defamation of Character, and Punitive Damages at 7–13, filed November 19, 2011 (dated October 8, 2010) (“Complaint”). Papa John's removed the case to federal court on November 19, 2010 pursuant to 28 U.S.C. § 1332 diversity jurisdiction. See Notice of Removal ¶¶ 3–4, at 2. On March 9, 2011, Hartnett filed an Amended Complaint alleging: (i) breach of an implied contract of employment and breach of the implied covenant of good faith and fair dealing; (ii) retaliatory discharge; and (iii) defamation. See Amended Complaint, filed March 9, 2011 (Doc. 25). Papa John's answered on April 11, 2011, asserting that Hartnett's employment was at will, denying the existence of an implied contract, denying retaliatory discharge, and denying that the allegations against Hartnett were false or that Papa John's knew that they were false. See Answer to Plaintiff's Amended Complaint at 4–6, filed April 11, 2011 (Doc. 28) (“Answer”). Papa John's also asserted affirmative defenses to Hartnett's allegations. See Answer at 6–9.

Harnett moved for summary judgment on May 25, 2011. See Motion for Summary Judgment (“Plaintiff's Motion”). Hartnett moved for summary judgment on the basis of res judicata or claim preclusion, and of collateral estoppel or issue preclusion. See Plaintiff's Mem. Summary Judgment at 1. Hartnett argues that the parties litigated and that the WCJ necessarily decided the issue whether he was terminated for good cause on October 17, 2007. See Plaintiff's Mem. Summary Judgment at 1. Hartnett also contends that Papa John's is precluded from now asserting that Hartnett was an at-will employee, because Papa John's did not argue Hartnett's at-will status before the WCJ where it would have given Papa John's “no defense to the worker's claim for temporary total disability benefits.” Plaintiff's Mem. Summary Judgment at 5–6. On June 14, 2011, Papa John's filed Defendant's Opposition to Plaintiff's Motion for Summary Judgment, asserting that “irrespective of whether Plaintiff was terminated for good cause, Plaintiff has not yet established Defendant's liability to allow this case to proceed to a determination of damages.” Defendant's Response at 1. Papa John's asserts that: (i) the Court cannot preclude it from defending, for the first time, liability for breach of an implied contract; (ii) Papa John's can defeat the implied contract claim by establishing that it reasonably believed that it fired Hartnett for good cause; and (iii) Hartnett has not demonstrated how a finding on good cause establishes liability for retaliatory discharge. See Defendant's Response at 4–6.

On June 14, 2011, Papa John's also filed Defendant's Cross–Motion for Summary Judgment. See Doc. 33 (“Defendant's Motion”). Papa John's moves for summary judgment against Hartnett on the retaliatory discharge counts, because the parties litigated and the WCJ necessarily determined the merits of the retaliation claim. See Defendant's Motion at 2. On June 28, 2011, Hartnett filed his Plaintiff's Reply to Defendant's Response to Summary Judgment and Response to Defendant's Cross Summary Judgment, filed June 28, 2011 (Docs. 35, 36) (“Plaintiff's Reply and Response”).² Hartnett does not dispute that the parties fully litigated the retaliatory discharge claim, that the WCJ decided that Papa John's did not discharge Hartnett in retaliation for seeking workers' compensation, or that “summary judgment is appropriate as it relates to Plaintiff's claim for retaliatory discharge.” Plaintiff's Reply and Response at 1. Hartnett also asserts, however, that he is entitled to “partial summary judgment based on either res judicata or collateral estoppel on the issue of whether Plaintiff was terminated for good cause by the Defendant on October 17, 2007.” Plaintiff's Reply and Response at 1. Hartnett argues first that res judicata precludes Papa John's from relitigating issues already decided and relies on collateral estoppel as an alternative ground should the Court determine that the causes of actions in the two proceedings are different. See Plaintiff's Reply and Response at 2, 4. Hartnett contends that, had Papa John's claimed at the workers' compensation trial that Hartnett was an at-will employee, it would have had no defense to the payment of temporary total disability. See Plaintiff's Reply and Response at 3. Hartnett alleges that instead of arguing that Hartnett was an at-will employee, Papa John's elected to bring a good-cause defense and that the Court should not permit Papa John's to assert Hartnett's at-will status as a defense. See Plaintiff's Reply and Response at 3. Hartnett further asserts that Papa John's cannot allege that it reasonably believed that it had sufficient cause to discharge Hartnett, because the...